Having access to more debt is NOT good for the economy in the long run, IMHO. That’s the only “benefit” I’ve ever heard about that results from higher home prices — greater access to HELOCS and cash-out refis, which are exactly what *caused the problems* in the first place.
The only other way higher home prices might benefit some people (at the expense of an equal number of people) is if they sell and move down or rent.
IOW, you are right on. Low housing prices are a net benefit to the economy, just as low gas prices, low healthcare prices, etc. are a benefit. I’ve never understood the argument about low housing prices causing any kind of “crisis.” If you couldn’t afford your housing payments in the first place, you shouldn’t have bought. Anyone who was relying on ever-rising housing prices to pay off their mortgages were playing a fool’s game, and deserve to be foreclosed on. Nobody is owed a profit just because they mortgage a house, and being underwater should only matter when you actually need to sell.
