That sounds like common sense, but it isn't the way things have happened in the past, at least if you are talking about nominal home prices. From what I've read

That sounds like common sense, but it isn't the way things have happened in the past, at least if you are talking about nominal home prices. From what I've read there's no example in recent history of nominal house prices falling during a period of rising interest rates. If you're talking about real home prices they might fall. If inflation is 10% and house prices go up by 5%, they're falling in real terms. But people don't want to, and sometimes financially are unable to, sell a house for less than they paid for it. Where's the inventory going to come from if people are underwater on their loans and won't sell? New construction. What happens to new construction when interest rates skyrocket? It grinds to a halt. I mean that's what the Fed is doing, on purpose, to kill inflation.