I'm sure the banks will auction off the foreclosed homes for steep discounts, and not just hoard them as rental units, right?

They'll have to. The era of a bank holding a house a decade, just to "flip" it for a profit are dead, and Xiden's inflation killed it. If the bank is owed X on a house, and inflation is Y percent a year, then the bank's options are to sell the house for X, or gamble on selling it for X(Y) a year from now.

Renting is going to be right out, because with inflation ramping up like it is now, any lease that's profitable at the last month is going to not be palatable in the first.