In increased demand. When demand increases faster than supply, prices increase, yes on not just the end product but materials and labor inputs as well. Rising interest rates constricts demand. When an exogenous entity has the power to artificially hold interest rates low they hold some blame for the resulting inflation of input costs as well as final home costs.
I agree that over buying is another by-product of artificially low rates.
I’m running with the assumption that material supply is not infinite.