So people sell their houses for Bitcoin, which drives down prices of homes.

But demand for rental housing (from the tenants' perspective), drives up the cost of rent.

Since people don't want to spend much of their Bitcoin, houses are made smaller and cheaper.

Since wages go down, affordability for buying and renting goes down.

As for mortgages, why would a lender want to lend out their best appreciating asset (Bitcoin) to someone whose wages are declining, to buy a house that is losing value?