Homeowners are typically going to be leveraged with a mortgage on their homes. This amplifies prices going up or down.
IE: I buy a house for 100 by using 20 of my own money and 80 of the bank's with a mortgage. If the house prices goes up to 120 and I sell, I now have 40 (doubled what I initially put in) after paying off the mortgage. If the price goes down to 50, I now owe the bank 30 (wiped out my initial 20 first then another 10 I'd have to come up with) if I want to sell.
At the classical 20% down 80% mortgage ratio you're in that 5x leveraged bucket for a long time (longer than you think due to amortization).
IE: I buy a house for 100 by using 20 of my own money and 80 of the bank's with a mortgage. If the house prices goes up to 120 and I sell, I now have 40 (doubled what I initially put in) after paying off the mortgage. If the price goes down to 50, I now owe the bank 30 (wiped out my initial 20 first then another 10 I'd have to come up with) if I want to sell.
At the classical 20% down 80% mortgage ratio you're in that 5x leveraged bucket for a long time (longer than you think due to amortization).