Right, but house prices have moved much faster than earnings, and if house prices fall, people will lose the savings embedded in those houses.
So people losing some "paper" savings is a price to pay so other people can also own.
But in reality, when homeowners struggle and sell their homes is mostly large real-estate funds that buy them. So it's possible that homes losing their value means owners lose savings but newcomers still can't enter the home ownership virtuous cycle.
Punishing millions of people who just sought housing security because, for reasons beyond their control, the Fed decided to cut rates after the GFC and keep them low for 15 years is just not tenable.
Fortunately, in the UK at least, it looks like (nominal) house prices will remain stagnant until real earnings catch up with rates. A better all round solution.
In the US market this may be tolerable because you have full-term mortgages, so people can just stay put even if they're pushed in to negative equity.
In the UK it's death. Here mortgages typically last for 2-5 years. Homeowners would be pushed in to negative equity and be unable to remortgage.
if a house is cheap, but is still valuable (as new owners _want_ to buy because it's worth it while it's cheap), then this means it's a mis-pricing. And mis-pricing means that any investing entity will want to buy as well. In aggregate, this _should_ push the price back to the correct equilibrium.
Therefore, housing being expensive today is a reflection of how many people value it high. It might also indicate that the reason it was cheap before was a mispricing, and those who got in early was merely lucky.