This is very subjective to a specific area, this statement may be 100% true in your area. But not all.

I wouldn't say luxury homes are more profitable, from what I saw working in real estate in Texas was that at 3% people that could afford a $400k+ home could not afford that same home above 4-5%.

What made homes more profitable in the Austin area was by building them very close in these tight knit neighborhoods that popped out of nowhere. Regardless if they were plain Jane or luxury type homes, they were built as cheaply as possible.

But most people are priced out by the now higher interest rates.