I'll believe that multi-sig wallets solve this when I hear frequent stories about regular human beings (not highly sophisticated tech insiders) who both understand them and use them successfully.
Mutli-sig wallets are but one non-custodial solution.
Not long ago, Signal demonstrated a way to recover passphrases in a way that server compromise doesn't really reveal anything at all about the passphrase itself: https://signal.org/blog/secure-value-recovery/ The OPAQUE standard also has similar properties to Signal's design but much more cheaper to implement: https://datatracker.ietf.org/doc/html/draft-irtf-cfrg-opaque... I point these out because Novi (Facebook's Diem wallet) implements the latter. These never require keys to ever leave a client device (which inturn could be a hardware wallet).
Useable security will take time. It was a long road from GnuPG to Keybase/Signal. Given the amount of cryptographers and engs building for "web3", I'm sure something useable will crop up. May be it is Moxie himself who comes up with it, who knows? ;)
At this point what is the blockchain providing that normal title records don't?
[0] https://moxie.org/2022/01/07/web3-first-impressions.html
Some are covered in this article: https://archive.is/k3w7F
> ...if someone loses access to their wallet they presumably lose the ability to ever sell their house.
It is software at the end of the day and seems like there is already a solution for it: https://en.bitcoin.it/wiki/Multi-signature