OK, sure. But inflation has an effect on the monthly payment as well. Assuming stagnant real wages (pay raises pace inflation exactly) if inflation is at 7% but you're paying 10% interest, by the end of a 30-year loan your fixed payment is effectively 8x smaller in real terms than it was at the start of the loan.

In other words, in that environment it was feasible to stretch to buy a home even at a high interest rate, because you knew that every year your fixed payment would decrease significantly as a share of your income.