A lot of invention and innovation in the past few decades is focused around doing more with less - e.g IKEA furniture made out of wood shavings vs. real wood years ago, apartments made more efficient and compact vs. big houses years ago, more biking and public transit vs. enough roads to fit everyone years ago. My theory is that on a macro level, the world keeps getting more competitive because we keep on churning ou…
Some of the problem we're seeing with costs is coming from the opposite of a decrease in footprint but from an increase. A small apartment seems cheaper and compared to a modern house it is. But a modern small apartment has many more requirements than even a mansion from 1890. The safety, environmental and equipment demands of a modern home of any kind are much greater.
On the other hand there has been a concerted effort to hold wages flat for the people at the bottom half of the income ladder. These two things taken together largely account for the perceived decline in quality of life for most people.