Housing is a mass customization market more than a mass production one. Most people don’t want to live in a modern Levittown. They want some space, but they don’t want the exact same set choices in their house as 1000+ other people have made.
In older areas it's also that the plots are not identical. The land cost is so high that it makes sense to spend extra on building customization to better utilize the land rather than plonk down a cookie cutter house that doesn't make good use of the views/sun/space/etc