Per Zillow, the very house in the linked article is up 14.6% just in the last 12 months. Decades what now?

If somebody bought it recently, chances are they own no more that 20-30% of it. Which means if the value goes up 14%, they are in good place (though not seeing a cent of that money until they move), but if the value goes down 20%, they are in trouble. And if they have to move, they are in real trouble.

Wait, highly levered investments are risky -- who knew?

I had the impression (from the last financial crisis) that if prices go down, home owners just mail the keys to the bank and walk away.

Assuming they have little equity to start with, of course.

It's not that simple. Bankruptcy or foreclosure ruins your credit and you have still to live somewhere.

Fine, but those people are not going to be getting another loan any time soon.

They are, actually. The market is hot again, and banks aren't idiots: they know that people pay their mortgages before other debt, even if they have a foreclosure in their past. Walking away from an underwater loan (which is a rational decision that connotes good decisions in the future) doesn't actually hurt your credit in the same way that getting behind on your credit cards does (which is evidence for poor money management skills).

I get the feeling this was written about more often than it happened. A lot of journalists were trying to justify their salary with ad views while the economy was in free fall.

Do you have data or any sources to go with this feeling?

It would be nice if the article provided some data.

That's unfortunate, but I'm not sure where it's written that investments must always go up.

No, and nowhere is it written that you get to decide when existing rules should be changed.

Our democratically elected legislators make and change the rules. It's not clear to me why they should preserve the value of an asset for a few people just because the asset might go down. Especially if there's a high cost to people who don't own similar assets.

Can you help me understand why that's a good idea?

Democratically elected legislators can also choose not to make new or change existing rules. If you want to leave it to democracy, that's why we have what we do now.