A house that was purchased with $250k of debt, that is now only worth $150k, has cost the buyer $100k, for nothing. That is $100k of lost wealth to the buyer. The buyer purchased $250k worth of house, using future earnings, and now only owns $150k worth of house (but still owes $250k of future earnings). That is a devastating economic blow to a middle class family, and to dismiss it as "they haven't really lost anything" is simplistic and cruel.