There's a lot of misinformation and worse flying around -- and given that after doing things that destroy your health errors here are the second-most difficult to recover from and can ruin you financially, this is truly sad.
First, interest rates on loans are not historically high, nor unreasonable. In fact they're bog-standard up-the-middle from a historical point of view in an economy with an actual 1-2% inflation rate. The rate of short-term (that is, less than one year) borrowing in a 2% inflation economy with a 2-3% productivity improvement (historically about average) should be about 5%, and that for longer-term money about 7%. Why? Because time has value; go ask any 60 year old how much they'd pay to have the last 20 years back.
In a normal market the average ownership period is about 7 years. You have a 30 year loan as the "usual" but the average ownership is 7 years; this is why most mortgages are based on the TNX, or 10 year Treasury rate -- its the closest large-liquidity government bond issue.
So spare me the whining driven by the industry and, I might add, the belief of many cultivated by the press and government that time has not only no value but negative value, just like the fantasy land world they cultivate where as long as your credit card still works all is well.
Thus it is a false statement that rates are "high" right now. Rates would in fact be normal in a 2% inflation and 3% productivity economy but we currently have inflation above that -- and wildly so in several mandatory purchase items such as car and homeowner's insurance, so in point of fact they're "a bit below where they should be" -- not "high."
Second, these policies and beliefs have directly driven up costs of home ownership that you have little or no control over -- specifically, property taxes and insurance. You can insulate yourself somewhat from the tax problem by where you buy and live in that some governments are more-crazed with the premise of "no cost to spend without limit" than others, but the insurance problem is not so-easily avoided. Simply put as prices go up for materials and labor, never mind the price of a given house so does insurance because every time there is a loss it has to be paid and that is recovered in premiums, otherwise there's no insurance at all. Further, said price ramps are doubled into insurance and the reason is that if there is a loss that prohibits you from living in the house (e.g. a fire) for a period of time the policy covers your replacement lodging, unlike renters insurance that only covers your personal property, since if a rental is destroyed you don't have to pay rent for the destroyed property and can go rent something else.
Do not underestimate the tax problem -- the insurance problem is somewhat new, but the tax problem is not and I have seen it my own family. My parents' home had two decades worth of potential appreciation destroyed by a rough tripling of the property tax bill over that period of time. I warned them when it started that this was going to happen because it goes into the PITI amount someone has to pay to buy it (principal, interest, taxes and insurance) so if you take that tax increase and, for example, put it and the escalation rate into a calculation over, say, 20 years that increase is the imputed decrease in the value of the house! That's exactly what happened and it destroyed all value add over two decades of time.
It can be worse if that ramp causes you to be unable to afford routine maintenance and a sinking fund for all the ordinary things that can and do go wrong in any house. HVAC systems wear out as do water heaters, refrigerators, washers and dryers, roofs and similar, and that ignores the "oh crap!" surprises which occur too -- sewer or water service line problems, septic or well problems if you have them and similar. The latter two are especially nasty if you're on private water and if they occur you need to spend that money right now or you might not be able to flush the toilet -- for real.
The basic issue is that a decade-long repression of interest rates, which was foolish and especially when Covid hit along with all the handouts into the economy has driven prices to outrageously-ridiculous levels, and for a financed transaction this compounds the damage. But even for those who laugh because they owned a house before that and now have an alleged "big gain" the problem is that tax and insurance exposure goes up as fast (in one case) and faster in the other, so existing owners are not exempt.
In addition there is a huge fraud problem in certain markets with insurance, particularly (but not limited to) Florida, never mind places that are casualty-rich (e.g. mountainsides and similar where fire exposure is serious) but builders and planning commissions have done nothing to enforce constraints that significantly mitigate risk and buyers who continue to think said risk isn't real and drive up price, and at the same time they refuse to permit insurance companies to price said risk as it really is without making others who are not exposed to that risk eat it. Nowhere in Florida was this more in evidence than at Mexico Beach where the homes on the beach were originally built as cinderblock disposable places as everyone who built them knew darn well a hurricane would eventually come and destroy it. When they were literal vacation shacks nobody cared; if the interior got flooded you took the stuff out, got out a shovel and pressure washer, dried it out and there you go -- and if the storm was really bad you put up more cinderblock and a new roof on top of the poured slab which was all that remained after the storm but then the craze began and people took what were $100,000 cinderblock places where $50,000 of that was the nice sand beach you had and tarted them all up into very nice and expensive places that someone was willing to pay a million dollars for yet had the same risk of being destroyed by said storm as the base risk to that structure had not changed at all! Then the storm comes and...... they're gone.
How can this be addressed? Realistically there is only one way: Prices have to crash, meaning down by half or more, and remain there. That will of course cause insurance costs to crash as well, although on the property tax side the resistance of state and local governments to cutting their budgets back will remain severe.
