A sharp fall in house prices might hurt some people, although the number who would be in negative equity is probably smaller than you'd think. A quick Google sa

A sharp fall in house prices might hurt some people, although the number who would be in negative equity is probably smaller than you'd think. A quick Google says only 28% of homes are owner occupied with a mortgage, and the vast majority of those will have paid off substantial capital. I think the premise is worth questioning though: It's true that many people have most of their wealth tied up in their house. But unless they want to substantially downsize, they can't access these savings. In general it seems bad that it's common for people to have most of their wealth in an illiquid, undiversified investment that they also live in.