My skepticism on housing wealth is reinforced with this nugget I picked up from reading Adam Smith's Roaring 80's:
We have really had only one kind of saving in recent years on a personal level, the forced saving of making payments on a house. Statistically speaking, the bulk of Americans' savings is the equity in their houses. The problem with this for the economy is that buying a house is not a very efficient form of saving. A house is not like a new machine that enables workers to turn out goods better and cheaper. Nor is a house like a new company that will employ workers. Homeownership is a stabilizing social force, but it really doesn't help us compete.
I'm not sure I'd fully agree with all of the above but there is at least several research topics in there:
1. Is buying a house an efficient form of saving, i.e. is there an asset with higher returns and lower standard deviation?
2. Does owning a home provide consumption smoothing benefits over an alternative asset?
3. If savings were in the form of another asset what would the effect be on investment and productivity?