Consumers have taken quite a while to adjust to higher (not high), mortgage interest rates. A lot of people were spoiled by the very low rates of 2020-2021, but forget that those rates were in place to offset a global pandemic, epic supply chain disruptions, sudden unemployment etc. Yes, low rates are mostly enacted to help fuel a weakened/weakening economy.

While higher rates make borrowing more expensive, they are also a response to a strong economy, robust consumer spending that fuels inflation, and low unemployment. What is the one thing the FED seems to look for most?  Weakening employment. Yes, job losses. What is the first thing corporate America does when they sense weakening or wish to boost profitability? Fire people. Now even governments are doing so. Often this is the quickest and easiest way to bring down expenses.

I will not argue the methodology, but it's important to understand that while low rates are wonderful, often during a low rates environment, employment is not as strong as when rates are higher. Good luck to anyone trying to secure a mortgage whilst unemployed unless you have outstanding assets and an alternative source of income.

How will corporate America offset potentially higher costs from reduced labor supply and higher tariffs? Reducing staffing is often their first option. Lowered taxes and regulation could help. Increasing technology that replaces humans is best done at times when you have a good excuse to do so too.

Additionally, many unemployed people do not wish to commit to buying something even if they could obtain a mortgage. Which leads them to renting. More renters = higher rental demand = higher rent prices.