> Using your housing example again, it doesn't really matter if a house cost $200k 20 years ago and costs $400k now, as long as wages doubled over the same peri

> Using your housing example again, it doesn't really matter if a house cost $200k 20 years ago and costs $400k now, as long as wages doubled over the same period, all things equal. Inflation is fine (for the purposes of buying a house) as long as wages rise to match that increase. You are missing one crucial aspect: interest rates. 20 years ago, typical interest rate was 8%, so mortgage payments on $200k house were something like $1400/mo. With today’s rate of something like 3.2%, the payments on $400k house are something like $1700/mo, which is 20% higher. To keep the affordability the same between now and then, the nominal wages need only grow 20%, and if they actually doubled, this would hugely increase affordability.