It a lot of factors but the main drivers are inflation and desirability. In places where the desirability is basically neutral, houses do what you would expect and “used” ones sell at a moderate discount to new construction.

They aren’t making more land.

They are making more valuable/liveable land.

Land itself is cheap as dirt.

Level land in Wyoming for $350/acre (so $70/house at median lot size). [1]

(Does it lack transportation, utilities, stores, schools, and jobs? Yes. Because those make land valuable.)

[1] https://www.land.com/property/80-acres-in-Sweetwater-County-...

Aren’t they? Isn’t that what sprawl is? Obviously, not literally creating more physical land, but developing land into useable land.

They’re making more useable land.

Sprawl has its own cost growth function. Bigger roads, bigger water distribution, bigger sewers, bigger runoff, etc. And typically you develop the easiest and best land first then expand in the more and more difficult to develop. This inflates costs as time goes on.

You can't make more of unique locations. Dirt isn't the issue, it's location. Times Square doesn't use that much "land", but it's a unique, non-commodity location.

Sprawl in NYC wouldn't create more Times Squares, so in this sense, "they aren't making more land".

There's plenty of land in Siberia. There are very few locations that are in the middle of dense cities.

If not for suburban zoning laws from the 20th century there would likely be more midtown-style skyscrapers in NJ/LI/CT.

Land is cheap. Location is expensive.

Home prices have an inverse relationship with interest rates. Housing cost as a percent of income has been relatively stable in the U.S. lower interest rates mean you can borrow more for a given monthly payment. Interest rates had a 35+ year slide from 1980 to 2005. It's been really weird since then.

  My living here doesn't attract more business or residents to the neighborhood

On the contrary, try getting internet, sewer, water, electrical, or gas hookups in a rural area and let me know the cost.

In fact, if you have a rural undeveloped plot of land amongst other undeveloped plots, and you pay to bring in electricity and gas or whatever, the properties around you will go up in value because now it’s cheaper to connect them up.

You living there reduces supply.