Raybyrnes,
I think your mom has a more rational view with regard to home values. If all owners decide to cash out their equities in their homes, multiple things could happen: profits will disappear because there are not enough buyers at the price they want; rents will go up and eliminate the rent vs own advantage; or home owners just end up swapping homes with each other and paying higher property taxes. Only relatively few people can take advantage of the timing (or be taken advantage of) in an illiquid market — mark to market gain or loss notwithstanding. So she might as well enjoy living peacefully than worrying about these fictitious gains and losses, unless she has a financial need for the home equity.
A similar view on the stock market does not hurt long term investment performance either. Financial market is a zero sum game. You can’t all profit at the same time. Real gain comes from owning good businesses long term.
