The materials for the home are cheaper (adjusted for increase in quality/utility). For example, insulating a house to the same level is cheaper today than in previous decades. Same with the plumbing and flooring and many other advances where plastics technologies made a lot of things cheaper and safer too.
Land in certain locations of course a different matter, as well as labor.
There's no way the run-up in housing prices is all land. In 1960 the average house price was 11,700... about 115,000 in 2022 dollars. I'm 51 and have built several houses. Since I was 22 and started being interested in real estate, the rule of thumb was 20% land, 80% house for the value of a new build. That means the average house in 1960 (no land) was probably about 98,000 to build in 2022 dollars.
The average house size in 1960 was 1200 sqft, so call that $82/sqft in 2022 dollars.
The US average cost to build a new house in 2021 was $124/sqft. Meanwhile, the construction workers building the house were getting paid on average $6933/yr ($67,700 in 2022 dollars) whereas a construction worker now averages $47,000/yr.
So the labor costs have gone down by 30%, but the price of the house has gone up by 51%.
The materials might be better or they might be worse, but they're sure not making houses cheaper.
Land in certain locations of course a different matter, as well as labor.