When a house "goes down in value" from $400K to $300K, that is not a big deal? Most people finance 90% so they would have put down $40K, meaning that they have lost 250% of their investment. Even on margin, you can't lose more thant 200% of your investment in stocks.
Hey, good points. Hadn't thought of it that way before your post.
We paid off our house within 10 yrs. Many folks told us it was not a tax smart thing to do but we don't like being in debt for any reason. Now, from your points, I realize that we were actually protecting our investment. Thanks.
That was exactly my point. When you lose money in the stock market it may suck, but at least you don't end up in debt and it's not particularly unusual for a stock to lose 25% of it's value. It happens and you try to pick a better stock next time. If housing prices do the same thing however it's a calamity.