As long as incomes rise faster than inflation, disposable income rises exponentially faster than overall income. Suppose your disposable income is 10% of your

As long as incomes rise faster than inflation, disposable income rises exponentially faster than overall income. Suppose your disposable income is 10% of your total income of 50k, so you have costs of 45k and 5k to spend. Let's say your total income rises by 10%, but your cost of living rises by 5%. You now earn 55k, and have costs of 47.25k (5% increase on 45k spending). Your total income went up by 10%, but your disposable income went up from 5k to 7.75k, that's a 55% rise. More than 5x leverage! I first noticed this early in my working life when a small increase in pay made a dramatic change to my disposable income. This means as your pay and career advances you can devote rapidly increasing resources to the highest priority spending in your life. For a lot of people, especially those with children, that's housing. Since a lot of people have that as a priority, and we're competing for a static or slowly growing housing stock, we're constantly bidding up prices against each other. Yes there are other factors too, like low interest rates, of course, but I think this is the main dynamic driving it.