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This is a good point, but I think there could be a better pathway. For example I live in a 1 bed 1 bath condo, and my rent is $1100 a month in South Scottsdale.
I have the money and capabilities to move up in housing to a 3 bed 2 bath house, but I don't because valuations are inflated and interest rates are neck snapping. When I don't move up in housing, someone lower in the totem pole can't move into my 1 bed 1 bath.
People being locked into their situations is what in my opinion can contribute towards a bad pathway for getting a place to live in.