House Prices In Gold Are Getting Cheaper (3 Charts)
Property prices have climbed quite a bit over the years. But if you measure house prices in gold (instead of regular currencies), buying a home has actually gotten much cheaper. Here are three charts for the US, UK, and European Union (it’s similar with other countries, too).
US house prices in gold
US house prices rose about 340% (in dollars) since the FHFA United States House Price Index (USHPI) started in 1991. USHPI tracks the average price changes of single-family US homes with government-backed mortgages (Fannie Mae or Freddie Mac). Apart from a pullback after the 2008 financial crisis, the index (gray, chart below) has gone pretty much straight up.
But what about US homes measured in gold? If you divide USHPI by the gold price in TradingView, it’s a different story. The average single-family home is about 50% cheaper today than in 1991 (red line).
UK house prices in gold
The UK property market is up roughly 410% in British pounds since 1991 – even more than the US market. The Nationwide House Price Index (GBNHPI, gray) also started in 1991. It tracks average UK house prices based on homes bought with a mortgage (not buy-to-let or cash buyers). But when measured in gold, the cost of your average UK home is down 35% (blue line, chart below).
European homes are also getting cheaper (in gold)
The Euro Area House Price Index (EUHPI, gray) tracks residential property price changes across Eurozone countries. In euros, it’s grown 65% since records began in 2005. But when you measure those house prices in gold (yellow), it’s down a lot (77%).
I found the same pattern with other countries like Australia, Canada, and Japan – house prices go down in gold. It means the value of gold is rising more than the value of the average home.
That makes sense: it’s easy to build more homes, but it’s a lot harder to mine more gold.
Key takeaways
- House prices are rising in fiat but falling in gold.
- Gold has preserved more purchasing power than real estate.
- This is a global trend.
As usual, none of this is investment advice. If you liked this piece, check out my free newsletter for how-to guides and investment insights across crypto, stocks, metals, and more.
