Inflation stats are just measuring the prices of a set of goods without regard to whether you need them or how much you need them. If inflation stats say you can buy 2x the number of cheeseburgers today that doesn’t mean you will.
I specifically mention housing because it is one of the main things (aside from education and healthcare) that our neoliberal economic system has not been able to import, and which have skyrocketed in cost since the 70s. And everyone needs housing.
You're incorrect. Inflation numbers do account for substitution effects (ie. People buying a cheaper replacement good). Something no one buys that goes up in price 100x has no substantial effect on inflation, while food that everyone buys going up 10% goes straight into it. Depends on the agency doing the stats and calculations, but it's probably in the ballpark.
Adjusted, people have more purchasing power today, even if they are spending relatively more on housing.
High house prices suck, and definitely are a big problem, arguably self-bflicted in most places by increasingly onerous regulations (zoning, building quality, minimum sizes, and so on). Certainly there are some benefits to that, but all comes at the cost of increased house prices.
The other thing is labour has become relatively very expensive compared to most goods today, and houses embed a huge labour cost component - so their price (along with other labour-intensive sectors like, well, education and healthcare), have gone up much more than eg. Food, which can be produced largely with capital investment (tractors and so on)
Unless you are suggesting that Americans’ standard of living should not rise for the last 75 years (despite productivity increases), that would only be relevant if buying houses at 1950s standards was possible for most people.
People don't want to live like their grandparents did in the 50s, so the market mostly doesn't offer it. So, instead of working much less and buying a 1950s-liike house, people prefer to work the same amount as their grandparents worked, and afford a fancy 2024 house.
In 1950 a house cost $7300. Average salary was $3000. So you could make 41% of a house in a year. You would be taxed at 17%.
In 2024 the median house price is $420k. So someone making $150k only makes 36% of a house in a year. You will be taxed at 19%.