Vanguard's trademark total bond ETF BND, which is a part of the classic 3-fund portfolio [1], a cornerstone of passive investing, has 2.2% commercial and 20% government-backed mortgage backed securities [2]. So a lot of everyday folks across America, especially those retired looking for a stable cashflow for retirement, are helping fund your mortgage. It's a bit of win-win situation (albeit a loss for them during high inflation as you point out): you need money now, and they need a mostly guaranteed return on their money in 10-20 years time that pays out better than Treasuries, and gives them diversification compared to bonds (either Treasury or commercial).

[1] https://www.bogleheads.org/wiki/Three-fund_portfolio

[2] https://investor.vanguard.com/mutual-funds/profile/portfolio...