Higher rates mean that the interest on that 20% cash that you would to give up is higher, so you are giving up the opportunity cost of having a a cash flow.
People need to live somewhere, you’re applying an efficient financial model mindset to someone who needs a roof and four walls. First time and new home buyers don’t care about the spread, they want a home.
Irrelevant. I'm just saying that interest rates determine the cost of borrowing money and the interest you can earn by having money, it does not really matter what you are borrowing money to buy.