> You can sell a bigger house for 600k, or a 35% smaller house for 425k, odds are you’ll sell the bigger house quicker.

Yes, and that's the point I was making in my comment. What's driving the price gap is that you're selling to a group with a much higher capacity to pay when you're building the 2000 sf homes.

But that has nothing to do with it being unprofitable to sell lower-priced homes, it's just less profitable. The talking point makes it sound like the home builders are trying to do good things, but they're victims of the government. No, it's nothing more than a desire to maximize profit, because the folks that are looking for 2000 sf homes are high income households with kids, and they're willing and able to pay a steep premium for that house.