They do increase wealth, it’s just that the prices of your preferred consumption basket (houses in this case) increases even faster (an important nuance). Weal

They do increase wealth, it’s just that the prices of your preferred consumption basket (houses in this case) increases even faster (an important nuance). Wealth is defined as the purchasing power across all possible consumption baskets - not just the one that you want though. So if you measure the value of your house in bananas, or oranges, or bars of chocolate, it’s value has definitely gone up.