[UtopiaPunk]

I think you listed great positives for ownership. I would agree with those. But the parent is correct that, at least in the USA, owning a home is considered a financial investment that should appreciate in value. I think treating a house as a financial investment leads to all kinds of bad outcomes, and here we are.

"People don't say home ownership is important because it's an asset for retirement; if you sold it, you wouldn't have a home in retirement!"

It's very common in the USA. A married couple has some kids and buys a house big enough to accommodate them comfortably. 20ish years later, the kids have moved out and the parents don't need such a big house. They also are about to or have recently retired, and they would like to stretch their retirement money. Sell the big house, make a lot of money, and then buy a smaller, cheaper house. In the USA this pattern is pretty common.

[angmarsbane]

This pattern has been disrupted because of the decades of under-building. The neighborhood I grew up in around an elementary school is populated by empty nesters and has been for over a decade. There is nowhere for the empty nesters to downsize into that isn't 3-5x what their mortgage is on their family sized home (in CA we also have the complicated of Prop 13 on property taxes) so they aren't moving. My highschool recently shut down because there weren't enough families in the neighborhood around it anymore.

[UtopiaPunk]

I think things are breaking, for sure, but how badly and in what ways is very local. To your point (and my point, a bit), with current market conditions, many homeowners are staying in their homes rather than moving. We had a pretty long period of very mortgage rates, and now rates are higher. Home prices have not decreased, either. So someone with a home that is a little too big has something valuable that they want to hang to, and buying a smaller house is, at least for now, not necessarily a good financial decision. But if housing were not an investment, a elderly retired couple could just move to a smaller house and not think too much about it. But it is an investment, so they stay in their unnecessarily large house hoping the market changes in their favor.