Rising interest rates will cool the market but that doesn't mean that the demand has vanished. People will simply remain longer in misery in their existing housing that doesn't suit their needs.
Being able to get a loan to buy a home in the past doesn't imply being able to afford to own it now, especially if the loan was an ARM, had an interest-only or negative amortization period, etc. (but even with a conventional fixed mortgage, financial situation can change for the worse after buying.)
This or not, having a house is pretty far away from "misery" in my book. At least you've got a roof over your head and no landlord to price you out of your home into the streets.
