Why are houses made out of wood?

As in most parts of the world, construction of homes is based mostly on the availablilty of building materials. If you live in a country that has an abundance of wood, you will typically build houses using wood. If you live in a country that lacks forests that can harvested readily for lumber you will build houses out of stone, rocks, mud, bricks or whatever you can cost effectively get. Second, there are plenty of houses in the US that are constructed of brick or stone. It's all a matter of affordability and personal choice as well as what part of the country you live in and when your house was built. In the US, brick is more expensive but not so much that only the rich can afford it. However, if given a choice, most in the US would rather own a home even if they are not willing to pay a 15-20% premium for brick. You also have to consider things such as energy efficiency, speed in which you can produce homes, protection from the elements, performance in natural disasters (earthquakes, fires, etc.) The science of home construction has changed dramatically in the last few hundred years so comparing houses built to in the US where most are built in the last century to houses that are 2- 3 hundered years old is not a good comparison. There's way too much to go into here. To sum it up, on average people no matter what country they live in will do what is the most convenient and cost effective to do. In the US that includes that houses are framed-in with wood.

well if we use concrete, there would be cold air coming thru

It is simply the most available material for a reasonable price. REALLY rich people build with stone, or at least brick. In countries that build houses with concrete, I'd bet that they don't have many trees arount. No one builds houses out of iron, though steel is used to reinforce concrete in structures everywhere.

I would think because it is the cheapest item to use. Also middle class uses stone mostly, or that is what is in my neighborhood.. it depends on where you live.

sturdy

Adaptability to style changes, accessibilty, and cost. Notice how all the houses in those 3rd world countries all like alike? Wood is far more accessible, here, than in those countries and cost much less here than in those countries.