I agree completely. But "owning" a $300k house makes people feel a lot richer than "owning" a $120k house, even if they're the exact same house! You're right

I agree completely. But "owning" a $300k house makes people feel a lot richer than "owning" a $120k house, even if they're the exact same house! You're right that payments are the same, because housing prices are driven by monthly payments not the dollar amount that you're signing for. Which is part of the problem, too. When mortgage interest rates fluctuate between 6-10% say, a person doesn't get terribly underwater that fast. But when they fluctuate between 3% and 7% a person can go from equity->underwater in a hurry, because the price fluctuations are so much larger. It's basically a y=1/x kind of problem and the closer you get to x=0 the closer you get to y=infinity in a very nonlinear way. Which is great if you bought a house a x=more and sold a house at x=less because you made huge gains. But if you bought at x=less and are trying to sell at x=more you can be very, very underwater.