Would a cool housing market affect 30 YTB?

I was under the impression that when home buyers finance their homes
with 30 YTBs, that the investors (i.e. creditors or bond holders) are
funding this by buying the corresponding bonds. Another words, when
the Smiths buy a home for $100,000 at 7%, then a total of about
$100,000 bonds gets released to the public. These bonds give 6%, and
the spread is profited by the banking intermediaries.

So if the housing market is really cool, then wouldn't this have the
effect of lowering the borrowing rates for the aspiring home buyer?

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