Well, I'm sure conversation on this thread is super dead, but: What you're saying all makes sense in the context of house-as-investment. But unlike other inve

Well, I'm sure conversation on this thread is super dead, but: What you're saying all makes sense in the context of house-as-investment. But unlike other investments, you need housing, and if your house's value appreciates, you can't just sell and put that money in something else -- unless you're moving out of the area. You could sell your house and rent, but rents and house prices move roughly similarly, so you don't save much doing so. If you sell and buy another house in the area, you just end up moving your money from one "investment" to another and probably have some tax problems (from Prop 13, in California). "Wiping out my entire investment" is less of a concern when all that means is that you can buy another equivalent house at the new price, and appreciating is less of a benefit when it means you need to buy another equivalent house at the new price. Going actually underwater on your loans is of course bad -- though most people shouldn't be so leveraged that modest drop puts them underwater. And those who are about to move out of the area or downsize, sure, they have much more of a traditional investment mentality. But if you're 20+ years from that? If you might never move away or get a smaller house? The value of your house means very little.