Are you suggesting wages and company provided benefits in private sector Middle America have not been stagnate for decades?
Put another way, today the median household income is $56K. In 1999, it was around $45,000. But when you adjust for inflation in today's dollars, the 1999 # is closer to $58k.
Using your analogy, saying a home in 1960 cost $18,000 is irrelevant. Adjust for inflation and that home cost is $150k in today's dollars. Then you have to account for the fact that homes are 2x as large as they were in 1960 and that the fit/finish on the inside is typically much, much nicer. Given the increase in size of the home vs 1960, the nicer fit/finish of the home today, and the fact that median household income is higher than then, a $250k median home price today doesn't seem that crazy compared to the $150k in 1960 in real terms.