Directories in home folder showing ~ in prompt

[ghost]

When I'm in my home folder and cd into a subfolder the prompt will say ~ as the cwd and continue to show that directory as ~ if I descend further, though appending the new folder. When I then cd into home again it says /home/ instead of ~.
I'm on a fresh ArchLinux install and tested both on zsh and bash with the same results. Also I'm using the gnome-terminal. The curious thing is that it doesn't happen on my laptop also with an Arch install and very similar configuration, so I guess it's some other setting, but I can't figure out what.

Here's a screenshot of what it looks like