The housing market isn't our economy. This is a bubble bursting just like the stock market bubble of the late 90s burst. It's not the end of the world to anyone whose savings are diversified.
You haven't been watching the markets lately. News on US housing has been driving the world markets for the last month or so. It impacts retail, financial companies, techology stocks. Shoot, even defense stocks have been driven lower solely on negative news in our housing market. Stocks in China, Japan, and Europe move on our housing market.
Or its not the end of the world for those who live and have lived...within their means; much less read the fine print on their mortgages.