Houses are an asset in people's minds. This means that you can sell your house if you need to get extra money and you're in a bind, or to downsize from your cur

Houses are an asset in people's minds. This means that you can sell your house if you need to get extra money and you're in a bind, or to downsize from your current house to a cheaper-to-maintain one. Let's say you bought a house for $400k with 100k down and have so far paid 50k towards the remaining 300k (plus interest, since it's a loan). The housing market has gone down, and your house is now worth $200k. (These sort of drops happen). Okay, so your house is worth $200k. You need to get out of there, but you've only paid 150k towards your 400k loan. You sold the house for 200k, so now you still owe 50k to the bank for a house you just sold for less. This does not help you out of your current situation, which was to sell an asset to pay for things, or to survive easier. Edit: Note. This is a VERY simple and slightly inaccurate review of how paying for a house works. The intent of it was to explain why lowering prices are bad for people that already own homes.