Housing is fungible. You can turn money into a house, and house into money. You can borrow against a house. You can borrow and put it into a house. You can rent out a house.
By this broken logic, "Movies are fungible". Because you can turn money into a John Carter, and you can turn Dune: Part 2 into Money. You can borrow against Star Wars, and you can license out Barbie.
But everyone knows, movies are not fungible, because they are not interchangeable. I can buy oil, or unleaded gasoline, and it's basically the same everywhere, it is "replaceable by another nearly-identical item, mutually interchangeable" -- oil and gasoline are fungible. But "Movies" are not fungible, because "Lord of the Rings" is not a replacement for "50 First Dates", which is not a replacement for "The Matrix", even though they're all movies.
Housing is not like Oil, housing is like Movies. It's not fungible, because a 2bedroom row-home in Foster City, CA is not "nearly-identical/mutually interchangeable" with a 4bed,2bath home in suburban Louisville, nor a 1bedroom condo in the Chicago Loop.
Even when the housing is all in the same zip code, much of it is still not fungible with it's alternatives, because housing is so regularly different and unique in a myriad of different ways. ("this one is on a hill, that one is in a valley, it has a higher risk of flooding. This one is in School District A, this house across the street is School District B, this house is in a city with income taxes, this house on the next block over is in a township with no income taxes, that house will need a new roof sooner, this house is in a HOA neighborhood, that house is near the bus line, this house is close to the freeway onramps, that house has fiber but this one is only Comcast Coax, etc")
I've watched thousands of movies. While they are not identical, and a very few rise above the usual, they are fungible. Action movies are interchangeable, murder mysteries are interchangeable, romcoms are interchangeable, and on and on. Once you've seen a few, they follow predictable paths.
Similarly with genre books. As a kid, I decided to read all of Ian Fleming's James Bond books. But after 5 or 6, I noticed that they all followed a formula, and got bored with them and never continued. with the series.
Yes, all houses are different, but the differences are largely superficial. You'd be happy living in any of thousands of homes in your locality.
Look up fungible in a dictionary. Housing is not fungible because not all units of housing are interchangeable. Being able to sell something does not make it fungible.
Your definition of "fungible" applies to literally everything on the planet. Everything can be exchanged for money and back again. That's not what fungible means. Here's another example to help you differentiate:
* Gold is fungible. Any bar of pure gold (of identical mass) is exactly interchangeable and has an identical value with any other bar of gold.
* Diamonds are not fungible. Every individual stone is unique and must be properly graded by a licensed jeweller. Two stones of the same mass are highly unlikely to have the same value.
The entire reason markets exist is so people can exchange what they don't want for things that they do want. For the purpose of this discussion, they are fungible.