Bitcoin (BTC) Beats U.S. Housing Market as Mortgage Rates Fall

Before the shift in mortgage rates, the United States housing market had been a tough nut to crack. Interest rate lock in at low pandemic and pre-pandemic rates

The United States housing market was a tough nut to crack before the shift in mortgage rates.

Interest rate lock in at low pandemic and pre-pandemic rates has prevented homeowners from selling their homes or refinancing.

Low supply of homes for sale due to pandemic-era interest rate fluctuations has kept home prices sky high. The 30-year fixed-rate mortgage in the U.S. fell to 6.47% by Aug. 8, according to data from the St. Louis Federal Reserve.

In November, home loan rates rose to record highs not seen in nearly eight years. Mortgage rates hovered just under 8%. So, the sudden drop in home loan rates ahead of any central bank rate cuts comes as a relief for the housing market.

Average U.S. home prices surged as interest rates rose after the pandemic. The average home price in the U.S. has been more than half a million dollars since 2022, according to Federal Reserve data.

“I don't have an endless supply of money, so I can't afford to just throw money at the bank because the interest rates are high,” said Melanie Suber, a real estate agent in Austin, Texas.

She may have been joking about the Federal Reserve because the central bank does have an endless supply of money. The entity can continue to add dollars to the money supply at whatever rate it decides to in order to maintain low unemployment and stable, predictably rising prices.

But Bitcoin (BTC), a new kind of currency made by and for the Internet, does not have an endless supply of money. Its fixed supply of 21 million Bitcoin creates shelter for holders from central bank price inflation. That hard supply cap also results in a currency that gains purchasing power against the dollar as the greenback's supply increases.

U.S. Home Prices in Bitcoin

As mortgage rates hit new lows ahead of a Fed rate cut in the U.S., here is how much Bitcoin (BTC) you would need throughout the years to cover the average home purchase price in secure Internet cash.

Aug. 2014 – Ten years ago, Bitcoin's price was $491, according to CoinMarketCap historical crypto data. The average U.S. home price was $340,400. Thus it took 694 BTC to buy a home at the average U.S. price back then.

Aug. 2019 – Five years ago, Bitcoin was worth $11,523, while the average U.S. home price was $382,700. So Bitcoin savers who had 694 BTC in 2014 and held onto it instead of buying a home or spending only needed to pull 34 BTC out of their bag to buy the average-priced U.S. home five years later.

Aug 2024 – Currently, Bitcoin's price has traded range-bound with key support around the $60,000 level since February. At that spot price on crypto exchanges, with the average U.S. home selling for $501,700 in Q2 2024, it takes less than 9 BTC to buy a house today at record-high home prices.

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