The housing market is in need of first time buyers.  Homeowners that own a starter home and are looking to sell are especially in need of first time buyers coming onto the market.  It is the first time buyer that will likely buy their home allowing them to upgrade to a larger property.  Then the homeowner selling a larger property to either upgrade further or downgrade gets the benefit of the first time buyer by the fact that a starter home owner is now able to purchase their home.  The entire property ladder is dependent on first time buyers flooding the market and keeping homeowners moving freely up and down the rungs.

Homeowners that are not considering selling their home are in need of first time buyers as well.  When the first time buyers slow down or all but disappear their absence is felt by all.  Without purchases occurring at healthy levels the demand for property drops and so do prices.  When house prices fall then property levels fall too.  Homeowners experiencing a loss of equity are experiencing a loss of their investment.  Some even find their property value falling below their mortgage debt level which means they are in negative equity.

A weak housing market hurts the overall economy.  Homeowners need first time buyers to return to the housing market whether they are selling or not and so do all consumers if they want the economy to return to a healthy level.  Once it is determined that first time buyers are growing in numbers the entire housing market and economy can take a deep breath and exhale.