I'm convinced that the mortgage rate problem is not about the rates themselves, but about the second derivative. That is, the rate at which the mortgage rates themselves have changed. In particular, the giant spike from ~2% to ~8% in a couple years.
If they are stable at 6%-7% for the next 20 years, you're right, they will absolutely be "totally within reason". But it's a big distortionary problem that a huge number of people have fixed rates at ~2.5% with almost three decades left on them, while the current rate is more than double that. It's super hard to eat an almost 5% rate increase to do the kind of normal nearly like-for-like home sale that usually comprises a big portion of housing turnover.