If people see uncertainty in their financial future, they will defer buying stuff. They will tell themselves “I can get another year’s use out of my coat/toaster/phone/tv/etc”.
You need to buy food and gas, you need to pay your utility bills. All else can be deferred.
.....most people don’t understand that the current, prevailing interest rate “on the street” (meaning what the average guy or gal pays NOT WHAT WALL STREET pays) dictates whether or not and WHEN you buy big ticket items. Just one example is a house. I live in my house because I pounced on low interest rates fixed for 30 years. My interest rate is 2 7/8. If I had to pay todays “market rate”........A. I wouldn’t buy and B. I couldn’t afford it because my interest rate today would mean my payment would be twice as much.
So, spiraling interest rates are going to beat down financial activity across the board but particularly houses.