Yes, that $1M house is a pretty illiquid asset. But consider the PoV of an average-ish (say) 65-year-old homeowner. He knows he could live to 95 or so, that m

Yes, that $1M house is a pretty illiquid asset. But consider the PoV of an average-ish (say) 65-year-old homeowner. He knows he could live to 95 or so, that medical costs go up far faster than the official US gov't inflation rates, and that being in a nursing home (which he might need for 5+ years) is already ungodly expensive. And that the thundering herd of older-than-him boomers may have trampled Social Security and Medicare to death before he starts really needing those. He ain't got $10M's in other assets, to say "whatever; I can afford it". The "value" of that house, and the idea that it could somehow keep appreciating far faster than inflation - those things are really, really important to that homeowner.