Homeowners who have a higher mortgage rate are less likely to hoard the property. Higher rates mean investments are less profitable. It means holding costs are higher and therefore the house is more likely to be re-sold. It also implies that homeowners who lose their jobs are more likely to need to sell or face delinquency and even foreclosure. Foreclosures have been ultra-low for many years.
The capital gains exclusion was designed in 1997 to help homeowners avoid taxes when selling their primary residence. At the time, the $250,000 (individual) and $500,000 (joint) limits covered most home sales. But those limits have never been adjusted for inflation.