That's taking it deep. Luckily most of our economies run on price systems. :) First, just because you're making more doesn't mean developers can charge more.

That's taking it deep. Luckily most of our economies run on price systems. :) First, just because you're making more doesn't mean developers can charge more. Building is a fairly competitive industry. Land is usually the thing that can increase in value in response to rising demand. Overall when thinking about housing prices the thing to consider is supply. Housing stocks take time to build up and there are all sorts of forces preventing them from increasing. That's really a different discussion but my personally opinion on it is that housing costs go up where and when the government and the citizenry want it to. Rising house prices are a weird pathology. They help credit markets, which everyone is fond of (banks, developers & home buyers directly; retail and any consumer spending focused industry indirectly). Homeowners feel wealthier when their property increases in value, even though the house is still the same house and they have no way of realizing those gains without moving to a different town.