Costs are going down significantly. Lower land prices, much lower material prices, lower subcontractor bids, etc.
When housing prices were increasing at such high rates, there was high demand for those houses, and high demand for the stuff needed to build them, so everyone involved in the construction jacked up their prices because if one builder didn’t want to pay the mych higher prices, another builder would.
The market has changed significantly, so prices for everything has dropped accordingly.
It’s called “the law” of supply and demand for that reason.
I get supply and demand. Are you sure about some of those assertions? Inflation, both on materials and labor, must still be a significant factor in keeping prices high - even if not at the levels previously seen. There’s still a housing shortage too, at least from my view (Michigan).