Have you taken into account the truckload of ARMs and had low initial 3 year to 5 year rates that are about to kick up adjust to the current higher rate.
And what about all the people who have now seen the value of their houses fall below the amount they owe on the mortgage and decide to that they’d rather default and take the credit hit than be pay $300,000+interest for a house that’s only worth $250,000.
ARMs generally go into the Alt-A category (which is where we are now after clearing most of the sub-prime).
IF lenders could (or would) refinance, most ARM buyers could get a reasonable 30 year fixed at less than whatever their ARM reset to.