The vast majority of people who own a single property (i.e. the vast majority of homeowners) don’t consider their houses as investments, since they can only realize liquid gains under very limited circumstances. Suppose you bought a $500k house and it appreciates to $1M. Unless your house appreciated faster than the overall local market or your are planning on downsizing/moving to a lower CoL area, all you can do is turn around and sell that $1M house to buy another comparable $1M house. That $500k of appreciation is completely illiquid.

While most people don’t particularly care about appreciation, nobody wants their housing value to fall because it could make them underwater on their mortgage, which in turn makes it impossible to move without paying out-of-pocket the delta between their house’s value and the remaining principal on the loan, which in the last housing crash was often hundreds of thousands of dollars.

At least in the US, where mortgage rates are fixed across the entirety of a 30 year loan, people buy houses mainly as a hedge against inflation, since your mortgage payment is constant across the entirety of the loan.