And others might be able to buy a house for the first time. The issue with houses being the main form of families to acquire wealth is that newcomers to the market have it much much harder to enter participate in it as time goes on and house values increase.

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.