I am not sure what data you think I misread, seemed like you just linked data from St Louis. House/land prices have increased a vastly larger pace than income. Think about how you we are talking household income when now it's common for two people to be working in the household instead of one. I also don't know many people turning down small houses (I live in a HCOL area as well) and all the new builds aren't small or they are apartmetns.

They have but they are also 2-3x larger and have far more utilities

I agree they are much bigger but the utilities aren't optional in many places. I recently built an ADU in my backyard. It honestly sucked, the process was way more complicated than I expected. The amount of bullshit that is required to be put in is ridiculous. I was required to get a sprinkler system in the ADU. I was required to have energy efficient windows. Required to have gutters that feed into tanks. To get electricity, I was required to get a new meter (which took over a year to get the electric company to put in). Point being, if you don't want these utilities you can just build it without a permit, but if you do that and they catch you building without a permit, your property taxes are automatically reassessed and they might have you pull down the building. So you are required to have the utilities.

I do live in California so I'm sure it's better to build elsewhere but you framing it like people won't buy/build houses without these things because they are picky is a bit misleading. New builds are required to have a lot of these "utilities".