Nope, it's still way too much for the job. I've never had a house built - so I don't know much about the process - but it seems to me the one paying the bills gets to make the decisions, not the person working for you. Running speaker wires through studs is not complicated or time consuming, so a couple hundred is the most it should really cost. Maybe if he was wiring 11 ATMOS speakers and a few subs $1000 would be OK, but 5.1? I don't see it.
There are other things to consider as well. I was a DirecTV installer for a few years. I'd have nightmare installs in very nice pre-wired houses because whomever did the wiring job didn't know what they were doing really at all. And this was just with satellite TV. Imagine if this builder doesn't know the first thing about room placement of speakers? Make absolute sure the final design makes sense.
The price does sound pretty high as well considering the walls are not in yet. This is the kind of price I'd charge for an "after the walls are up" kind of install where it's going to take a LOT more hours to make things look nice.