An example of a horribly misleading graph

Everyone knows the housing market is collapsing and everyone seems to think that their house is no longer worth anything and not selling. BBC posted this graph a while ago which shows the percentage that housing prices are changing.

Lets interpret: For the first 5-6 months of 2007, prices went up about 11% a month.

By the end of the year, housing prices were still rising by 5%, which on average, shows that over the whole second half of 2007, prices were still rising by 8%.

For the first 3 months of 2008, housing prices were (still) rising, but by not as much.

Only the last 4-5 months of the graph actually show prices falling. on an average of about 5-6%. (I shall say 5 months at 6% to be fair).

Let’s use some real numbers… Read the rest of this entry »