This is how it is in my part of the US. Not so much houses as large luxury apartment buildings aimed at the wealthy (and being built with taxpayer subsidies). They are doing nothing to address the very real housing shortage.
The problem is that we weren't building luxury apartments 50 years ago, it was all single family housing. So there aren't any luxury apartments that can degrade into cheap housing. Building luxury apartments & condos now will help the cheap housing situation in 50 years time.
Just like cars, all new housing is luxury. No one working minimum wage can afford the cheapest new car on the lot. But those new cars get bought by people who sell their used cars.