I'm not sure it's a mistake, tbh. It was a shit sandwich any way you sliced it.

Rentals are being sold out from under people often enough that renting anything privately owned is an eviction lottery.

There are no 3BR apartments available, so families mostly want houses, which are largely privately owned.

At the time, mortgages were cheaper than rent, and interest rates had been dropping fairly steadily for 40 years. We can look back with hindsight and say people should have predicted interest rates quadrupling, but I don't think that's fair.

Sure, people should have known rates would go up, but that's what the extra qualification "stress test" was for, right? (Or, I image something like that was a common refrain.)

I'm house poor and overextended, personally, but I'm fortunate enough to be able to work more than full time to pay it. It sucks, but it's still better than being forced to move my kiddos 4 times in 5 years, like my friend.

Maybe this house will be worth half what we bought it for in a few years, but we gotta live somewhere, and the stability of owning is worth quite a bit.