Atleast for the past few decades, salaries have increased less than what's needed to compensate for the change of value of the currency. Meaning the amount you make each year will on average be worth less.

The loan amount, however, will stay contant.

Your pay goes up. It just goes up 4% per year, while inflation goes up 10%. This does mean your loan becomes 4% "less" per year. It's just Big Macs go up 6%, making your pay worth less Big Macs. But your pay still becomes worth more loan repayments. The big increase only applies to new loans.

I would also like to point out that at 4% per year pay increases, houses become worth that amount less per year, for the same dollar amount. That means they "drop" 20% in price over 5 years.

That's not going to happen, salaries are depressed and are not keeping up with inflation by a large margin.

Everyone freaked out about rising wages because they saw fast-food worker "we're hiring" signs offering $17/hr... meanwhile the $20/hr worker nearby saw a 1.5% COL raise in a 10+% inflation environment (and higher inflation on the cost of things that actually matter).

The balance on an existing loan doesn’t increase with inflation, though.

Yes, but the interest payments on mortgages with variable rates had doubled. Now some people basically are paying interest only without paying off their principal amount.

Most folks aren't on variable rates.

If you're on a fixed 15-year or 30-year then inflation is generally working in your favor.

Salaries not going up is not directly related to mortgages, and while I can't speak to all jobs, has been pretty good in the STEM field.

<2% of US homes are on variable rate mortgages.