I don’t think high house prices is the right metric. Increasing home equity is the key.
Rising prices means rising equity for existing homeowners. This means a perceived increase in wealth, which is only realized when they sell the home. HELOCs and cash-out refis were used to give the illusion of cashing out of the game with a big profit.
Rising prices also means rising appraised values. More tax revenue for governments, so it keeps them happy.
I don’t think homeowners now really care about the price of their home in the conscious sense. I think the unconscious, underlying and dominating perception of lost wealth and status is what is driving them batty. Those who never sold, never cashed out. Those who took HELOCs and cash-out refis never cashed out, even though they thought they did.
Those who sold for profit are the ones, who alongside first-time buyers, would like to see prices fall.
