The value of houses are tied to the value of land, and you can't make (much) new land. That's why houses in economically advantaged cities are more expensive than houses in economically disadvantaged cities or out of the way places (unless those places are desirable for being out of the way).

That said, we can do things to get more people per square km in cities, even without going to high rise apartments. And certainly, not promoting more effective housing options hasn't helped the price of homes, either.