This article has some good data/graphs.
https://themortgagereports.com/61853...art#historical
I think the issue is how fast we went from ~2% to ~7% on the 30yr fixed. The run in the late 70s-early 80s wasn’t as fast for doubling+ as this year has been for tripling+
We will adjust. ARMs will return in force, for example. It definitely reduces affordability, forcing people into lower cost homes than they had planned, but in time wage inflation will catch up. That was the deal in the 1970s - buy more house than you can afford on an ARM, let your income catch up (due to inflation), then either sell (trade up, repeat), or convert to fixed mortgage. Like most financial strategies, it worked well right up until it didn’t.