People moved away from urban centers because they believed (correctly) that living in dense cities detrimentally impacted their health. This later accelerated in part because of racial reasons.

Housing demand could have easily been met (and was met in Asia and Europe) by building denser urban structures, which is what you would expect to happen if there was a confluence of housing demand, increased wealth, and a general interest in living in cities. There was no interest in the latter, which is why suburbanization took place.