Its really just because of supply and demand. We made it illegal to add more supply. Los Angeles up until the 1960s was zoned for 10 million people with a population under 3 million, you were allowed to develop your single family home into a 25 foot wide 5 story brick apartment building and many of these went up in neighborhoods like hollywood and koreatown.

Today homes are out of reach for middle class because we have a population of 3.9 million in los angeles, but have a zoning capacity of only 4.2 million. It's not exactly rocket science how to fix this mess. Legalize building housing and housing will appear to satiate demand.

https://la.curbed.com/2015/4/8/9972362/everything-wrong-with...

The best reason for housing prices increasing faster than inflation is that the western world has made it policy that middle-class wealth is based on housing prices rising faster than inflation so many economic actors will personally benefit from higher and higher housing prices.