That's fair, but it assumes that a lot of people who took mortgages that only "worked" because of the low rates won't go bankrupt once the rates increase. Strong economic activity and inflation simply does not translate to higher wages for a significant proportion of the population.
In other words, if you want to shelter your money from inflation the best approach might not be to tangle your money with assets that are currently overpriced because of the low interest rates.
Most people have fixed rate mortgages these days. Ninja loans were mostly regulated out of existence. Most institutions are expecting home prices to revert to the mean inflation of about 2% per year.
So we won't likely experience mass defaults due to arms this time around.
I personally think it's more likely that rising rates (if it ever happens (hate you, fed!)), will more significantly impact businesses with heavy, non fixed debts. They would need to refinance at increased rates which is more expensive, likely dampening their economic activity and potentially forcing layoffs.
That may lead to consumers cutting back and push us into a recession/deflationary cycle, and that would perhaps put downward pressure on the housing market.
But I don't trust the fed. They refuse to do their job. If the above happens they'll probably instantly cut rates again just like in 2018 (I think?) when they raised them by about 25bps and then immediately caved to the market decline.
It's sickening. They're not doing their job. We've needed to raise rates for a long time (and cut gov spending). But we're a sick beast that is slowing dying of infection.
In other words, if you want to shelter your money from inflation the best approach might not be to tangle your money with assets that are currently overpriced because of the low interest rates.