I think you need to add another category.
People who have medium size mortgages and don’t mind of the price drops below what they paid because they are in the house for the long haul with full intention of paying off the mortgage and living in it till they’re hauled off to the nursing home or mortuary.
Our house is worth less than we paid (at least according to zillow.) But I don’t mind because we’re on track to have it paid off in 9 years and be mortgage free. It seemed ridiculous it was so expensive at the time. But I looked at the purchase as shelter/housing… not as an investment that could/would be cashed out. I think a more affordable/sustainable market is better for everyone. If 50% or more of household budgets are directed at housing, the non-housing portions of the economy suffer.
