Why starter homes got harder to build at scale

America’s giant homebuilders didn’t start out as giants. They began with entrepreneurs, cheap land, returning soldiers, borrowed money and a conviction that millions of families were about to want something the country had never produced at scale: a house of their own. In Texas, naturally, we added dirt, leverage and the occasional willingness to sign a note that would make a modern risk committee break out in hives. I was reminded of that recently when I sold a house at 4419 Sexton Lane in Dallas: about 1,200 square feet on a 50-by-135-foot lot, born as a production house. Texans of a certain generation would simply call it a tract home, in a development tied to the early entrepreneurial lineage of Clint Murchison Jr. and Centex. The house sold for $600,000, or roughly $500 per square foot. Not bad for a house whose original mission was the exact opposite of luxury: putting an ordinary family into a detached house on its own piece of Texas dirt. Today, that former tract house is effectively the bottom rung of detached single-family housing in Preston Hollow, an accessible entry point to the American Dream that survived long enough, in a neighborhood scarce enough, to become a $600...