>People are "banking"(gambling, really) on the increase in home
>value as a form of "interest income"/savings.
But a capital gain on an asset is not a form of savings. As Keynes said somewhere, savings and investment are two names for the same thing, foregone consumption. Money has value only because it's a claim on real goods and services. Income is the other side of production, and if you save out of income, you're choosing not to consume goods and services produced at the time you earned the income. With a capital gain, there's no corresponding production, so it's not really saving. It's just a redistribution of cash from buyer to seller. Net social wealth is unchanged.
Doug