There's a lot of opportunist sellers with locked-in sub 4% rates that are only selling because they can make a quick buck.

I think we'll see desperate folks buying overpriced homes half the size that they could have afforded just months ago

Or the housing market liquidity will collapse as all the would be sellers sit on their house while they wait for rates to go back down.

Tend to think this is what will happen. Unless you have no choice what advantage is there to move if your interest rate is less than 4% in today's market? Almost certainly moving will mean a smaller/worse home for more money each month.