There is a housing component to the CPI. It uses rents instead of home prices and makes some tradeoffs, but it seems fair to me overall. If you live in SF or NYC or similar cities it can seem that CPI underestimates inflation due to high rents/home price, but it is a national level metric, so that's somewhat expected.

I think it is more class related. As income/wealth divide grows, the cost to move up to the next socioeconomic class grows. If you are expecting to have jumped up the ranks into a certain neighborhood or school district, a certain city, vacation to certain destinations, then those will have become further out of reach.

It might be accurate to say the cost of your dreams or goals is increasing faster than official statistics.

In some markets, sure. However if you look at median home prices from 1980 to today and factor in interest rates (which are much lower today) and median income then you see that homes are about the same as they were in terms of monthly payment. With the upside today that early in your mortgage more of your payment goes to principal.

If interest rates were to go to 8% overnight, besides crashing the global economy you’d see home prices cut in half. Homes are priced at what people that want to live there are able to pay per month. As interest rates fall home prices rise. Like I said certain markets have outpaced but their median incomes have outpaced as well. This makes sense as the upper middle class has grown a lot the last 40 years to make up much more of the population by percentage (there’s a lot more high paying professional jobs today) and people like to live among people of similar financial classes for obvious reasons.

Houses are assets as much as they are expenses, so the CPI uses rent instead of home price.

House prices are considered asset prices, not consumer goods.

Only shelter part of housing is in the CPI.