How much have home prices inflated over 250 years since our country was founded? Hey, I’m Danny, the ethical realtor. Happy birthday, America! 250 years, amazing, love it! Great country to live in, I’m glad I’m here.
I saw an infographic going around showing price inflation on various things. One of them was home prices, one of them was commodities, like coffee, one of them was things like livestock, one was the price of gold, since that’s like a currency over the years. And one thing stood out to me immediately. Home prices have inflated way more than any of these other products, and that is very surprising to me.
Inflation of Other Things Compared to Homes
So, I was looking at the numbers. Typical farmhouse $420 in 1776, and then $420,000 in 2026. Okay. So, how much inflation is 420 to 420,000? That math is pretty simple. It’s more than a thousand times the original price. That is huge! Over 250 years is that normal? Not normal? Hard to say, right? It’s a big number, but you need to put it in context to know how much it really affects things.
So, let’s look at some of these others. Bread, $0.02 in 1776, $3 in 2026. That’s a 150 times jump. So that is a big change right? Coffee, $0.25 to $10. That is 40 times inflation. Cow, $10 to $3500. That is a 350 times inflation. Okay. Gold $19 to $4000. That’s a 210 times inflation with some change.
So 210, It’s pretty big. 350, pretty big. 150 for bread, not as big. But home prices, 1000 times the price that it was! That is not just crazy, it’s five times the inflation price of gold on the chart. That is wild.
The Recent Inflation
And so that makes me want to think. What is our monetary policy doing that is creating this mega inflation? And in fact, anyone who’s lived in the US for the last five years has seen this happen again. Prices have doubled over the last five years in most of the country, this is huge. This is really big.
And so, I want to say that we need to be thinking smarter about the market and about how these home prices have been inflating and how this is unhealthy. It was around 20 years ago when I bought my first house, it already seemed very expensive. There was a bull market.
There were high prices in 2007, about when I bought my first home. And that was a big deal at the time. But now, 20 years later, home prices are more than double what I paid then, and it is just still going that way. So, how do we fix this? It’s a real complicated issue.
Inflation and The National Association of Realtors
I’m a member of an association. It’s called the National Association of Realtors, and they are the biggest private lobbying group, I believe, in the nation. And they have been lobbying for property rights, among other things, for many years. In fact, I was in part of the local leadership here in Utah, and I helped shape some of that.
But you know what? It never seemed to be going in the direction that I really thought it should, which is, for example, keeping home prices affordable. So as of right now, the last couple years, because of the recent inflation, there has been some movement toward affordable housing. But I think we are 250 years too late on this stuff.
This is stuff we should have been on top of, you know, all along. But I think the priorities of the association have not been toward the average consumer and how they can afford home living. Their emphasis was probably more on market and making sure transactions completed and making sure people got paid. So, I think their perspective and their focus wasn’t on this type of issue, but this type of issue has now become big, and I think it might be too big to solve.
You can’t just reverse home prices. So, I really wish we had been looking at this 50 years ago, 75 years ago, 100 years ago. And I wish that these were things that were more important. So home prices, for example, for residential homes at least are not just nice to have. This is a need to have. People need to have a place to live.
What Should be Done?
On the other hand, I understand that you can’t just control the prices, because if you control the prices that causes other problems. So, it’s not an easy solution. But I really hope that we can make this a priority, these kind of things that we can’t turn back, that we need to keep them reined in. We need to keep them regulated appropriately, and we need to make sure that this is on our minds, that when we adjust, say, the interest rates in the US.
For example, when they adjust the interest rates down. We just had 10 or 15 years of super low interest rates, like 2%, 3%. That is way low. That is too low. And I can understand why they made the decisions when they did, but that caused a lot of the home price inflation that we have today. So, I really hope we can get our best minds on it and maybe look for some solutions to make this more affordable, make it more realistic that people can be homeowners, and that we can maintain the standard of living this American dream of people owning their own property, raising their own families on property that they own.
That is something that we need to maintain. And it’s going to be big federal policy that’s going to maintain that, and it’s going to be state policy and local policy. And I appreciate everybody who’s working hard on this. Let’s keep an eye on the ball.