No they're not.
I co-founded Fabrica.land in 2017, and in mid 2018 we used an NFT to perform a real estate transaction. That's already 3.5 years, and NFTs were already around. The first transaction was a bit "rough", but perfectly valid. Lot of progress since then.
From [0]: The ERC-20 (Ethereum Request for Comments 20), proposed by Fabian Vogelsteller in November 2015, is a Token Standard that implements an API for tokens within Smart Contracts.
Note: yes, ERC-20 has a few flaws [1], and subsequent ERC have improved on it.
[0]: https://ethereum.org/en/developers/docs/standards/tokens/erc...