The trouble with houses as an asset is that while it is rare, there are times when you just can't sell the #######, no matter how cheap you list it. These periods don't last long, 6 months or so as the market implodes and 40 or 50 percent gets knocked off the value, but it happens every now and then, usually when the interest rates top over 10%. If you have to remortgage at this point it doesn't matter what principle you have in the house or how small the mortgage is, if you can't make the payments and you cant sell the house you are hooped. We have had a generally rising market for so long people forget that we can and have had decade long dead markets.
The idea that a house is an asset is predilated on the idea that the real estate market will only ever 'correct' for short periods of time, that as long as you can hold on for a year or two things will return to 'normal', at some point we will go into a decade long 'correction' and a bit of reality will be injected back into the market.
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