Theoretically, the market going up or down shouldn't make any difference at all to most owner-occupiers. If they hold onto the house, short-term fluctuations d

Theoretically, the market going up or down shouldn't make any difference at all to most owner-occupiers. If they hold onto the house, short-term fluctuations don't affect the eventual sale price. If they buy a new property in a similar market after selling the old one, then the "losses" on the old house are made up for by the "savings" on the new property. It's only people who downsize or leave the property market altogether that would be affected by a short-term dip. (The caveat being, of course, that this completely handwaves away human psychology! Being "underwater" on the mortgage would definitely make a lot of people stressed and anxious.)