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Housing as a wealth generator is a bit of a lie. Prices going up only benefit people or corporations who own multiple homes or those who rent out their homes, and the few people downsizing for retirement by selling their 2500+ sq ft for a small apartment somewhere.
For the regular Joe you always need somewhere to live, so it doesn't matter if your houses is $100k or $1 million, that money is always going to be tied up in the house and not be spendable.
If anything the prices being high is worse for regular home owners because you're going to be paying thousands more in interest on the mortgage that goes straight to the banks.
I'm not arguing in favor for house prices going up but just wanted to point out how a lot of people use the value of their home. You can pull out money from your house and your interest payments don't change when the value of your house goes up.
I'll give the example of my neighbor. They bought their house 10 years ago at about $250k. Interest rates were around 4.5%. We're in a location that got really hot during the pandemic and the house value jumped to about $700k. At that moment, they had the same payments as 10 years ago. Then interest rates dropped down below 3%. His balance on the original mortgage is probably about $175k and now he refinances the house with a mortgage of $325k, pays off the old loan, and pockets $150k out of the house. But due to the lower interest rates, his payment is the same as it was 10 years ago. He just has $150k in his pocket. Meanwhile, I'm the schmuck who had to buy the identical house at $700k at 5% and pay 3x for the same house.