Inventory is so low, it's extremely difficult to buy even if you wanted to

Roughly, for every extra percentage of interest, your maximum mortage becomes 15% lower.

inventory is building back up at a rapid pace. I see lots of construction everywhere.

It depends on the area, of course, but most of the construction you're seeing is likely already purchased; developments sell well before the shovel hits the ground these days.

I imagine there is a huge backlog after the lumber price spike in 2020 has trickled back down

Depends on who is already financed. Likely this will be a lagging indicator and we’ll see further increases in institutional investment. Government at all levels will avoid being involved because citizens have grown used to the liquidity of their homes. The long term consequence to the retail market is going to be a tough pill to swallow. Builders adding to inventory are partnering with institutions already. All of this plays out in favor of expanding the SFR market share.

But the demand is still there. And many buyers powered by stock market returns.

Buyers' cost tolerance is driven by the cost of their mortgage, which is extremely sensitive to interest rate hikes, which typically rise as a way to curb inflation.

No cheap mortgages means a lot fewer eligible buyers.

I'm not complaining (I haven't bought a house yet).

All that free money drying up