The idea that inflation of everything non-housing means home prices aren’t as high as they appear doesn’t make any sense.

Regardless of the cost of gas, food, and water people have to buy these things. They will adjust their spending in other areas, assuming getting a raise on demand is not an option. Housing is different.

People renting do not suddenly rush out to buy a house because home prices adjusted for inflation appear low. If anything, higher CPI/core inflation will reduce demand for housing as income, which is stagnate at best right now, goes more towards food and energy.