[lostcolony]

Which is helpful if they want to and are able to move to an area with lower real estate prices. Otherwise that 'wealth' is tied up in a good they are unable to sell (without incurring an implicit debt of either needing to find another house in the same high price area, or having to pay for rent in the same high price area).

A house may be a reasonable investment vehicle; it can also be an extremely illiquid one.

[throwawayfire]

If so, they still have $1 million more to spend on rent.

[lostcolony]

Certainly. If they've actually purchased the home, and are not mid-mortgage on it. Honestly, crunching the numbers in my high COL area, the cost for a ~$1 million mortgage and the cost for renting a nice two bedroom, at the current rates, are basically the same.

Essentially what you're saying is that because someone has put money into mortgage payments instead of rent, they're better off financially, and I'm completely in agreement with you. I just don't agree that it somehow implies they're living high on the hog, so to speak; yes, they have additional options if shit hits the fan (metaphors metaphors!), in that they can cut their losses, look to sell, and move to a lower cost area and have a bit banked (and -maybe- retain their income given remote work, but also maybe not), but that's still quite a lot to expect.

[throwawayfire]

>the cost for a ~$1 million mortgage

The scenario in this thread was originally "the house they live in just happened to appreciate significantly and is now worth over $1mm". You're describing quite a different situation.

That owner by definition does not have a $1m mortgage - or if they do, they have quite literally cashed out.

That owner is, in fact, saving a proportion of everyone else's general housing costs, compared to new buyers and ongoing renters.

Someone with a $1m mortgage is in quite a different situation (while likely very rich in terms of net worth, does not have to be a millionaire in terms of net wealth).