I don't know what kind of backwards logic that is. Banks help first time homebuyers purchase their house. Builders build houses and add supply that helps meet demand (everyone needs a place to live). Real estate agents help navigate the process for people who are unfamiliar with all the different steps.

There are bad actors in all of these (banks caused the financial crisis and agents are probably paid more than they're worth for $1M+ houses in CA), but the biggest root cause that's missing from your comment is NIMBYs blocking new development almost everywhere.

Not seeing "NIMBYism" in Nebraska.

Instead I am seeing developers who would rather build an upper-middle class neighborhood, not a starter home one, because they can get a much larger profit for only a little more effort/material-cost.

I suppose when they are finally unable to sell them they'll start addressing starter homes. I have no idea who could still be buying all of these though. (Perhaps people leaving CA like I did after retiring — they're not going to like the property tax rate though.)

NE seems relatively affordable?

Expecting starter homes to be a category of real estate that is newly built seems naive. Starter homes are some combination of older, smaller, bad location which makes them more affordable. Why wouldn't real estate developers satisfy the demand at the high end before moving down market? Seems like the easiest way to turn a profit to me. Rational actors etc

I’m still not clear that this actually a problem. If they overbuild more expensive housing, isn’t the inevitable result that they’ll have to eventually undersell it? There’s only so many wealthy persons, and no matter how fancy the house is I only have so much money to spend.

So in the long run, I’d expect that developers are really funneling money into the lower class by overbuilding upper class housing, when they eat the losses on their poor planning.

I’m also fairly positive a 30-year old upper middle class home makes for a fairly good starter home