One thing to note on your first point: Equity loss doesn’t make a difference if there is no mortgage. When housing prices are stagnate or increase, you can sell your home for a similar one with little to no loss (the buyer of your house effectively pays of your old mortgage and you roll your equity into your new mortgage).
BUT, if prices tank while you still have a significant portion of your mortgage owed: you’re screwed when you need to relocate. The sell price of your house won’t cover the reminder of the mortgage. If you need to move, you either pay it off (hope you don’t need to move for work) or foreclose. The bank is cool with either - they couldn’t care less about you.
One thing to note on your first point: Equity loss doesn’t make a difference if there is no mortgage. When housing prices are stagnate or increase, you can sell your home for a similar one with little to no loss (the buyer of your house effectively pays of your old mortgage and you roll your equity into your new mortgage).
BUT, if prices tank while you still have a significant portion of your mortgage owed: you’re screwed when you need to relocate. The sell price of your house won’t cover the reminder of the mortgage. If you need to move, you either pay it off (hope you don’t need to move for work) or foreclose. The bank is cool with either - they couldn’t care less about you.