Absolutely yes, but there's a bit more nuance than it seems. For example, 40 years ago, most families had one car, no computer, no mobile phones, no Netflix, DoorDash, etc. Houses are bigger, foreign holidays, expensive white goods, etc.
On the other hand, property costs have definitely increased massively. Folks are having kids later and less frequently, so there's a higher percentage of dual income couples looking for houses. Lenders are prepared to offer more to dual income couples, then house prices adjust, and suddenly, you need to have two incomes to buy a house. Then when it does come time to have children, you need the second income to pay for child care, and there's not much left over afterwards.
Higher household income doesn't necessarily have to mean higher property prices. It's a factor, but that's only one half of the demand/supply equation. Long term, the price of housing is driven by how much it costs to build more.
Good point. Building more housing is indeed part of a possible solution, although it’s hard to convince folks whose mortgages are baselined on inflated prices not to oppose building more.
Realistically, I don't think most people think that way. ("Don't build that apartment! The resulting increase in the local supply of housing will decrease my property value.") It's more that they don't want to live next to whatever is being built or don't want the character of the neighborhood they live in to change.
Which is somewhat understandable, but there's a balance here between the rights of existing residents vs the property rights of the owner of the property being developed (and future residents thereof). There are also regulatory burdens associated with any legal processes intended to give more rights to existing residents.
I think you’re mostly right that people don’t think in those terms exactly, but “oh if they build more housing traffic will be a nightmare” or “it’s already hard enough to get into the good schools” or “I can’t even get a doctor’s appointment before you build a hundred new houses” and so on: not directly about cost, but I think they do think about all of the things that drive value (and therefore cost) in the existing housing stock.