Many people don't understand that it has fluctuating value. And yes, it's still a place to live, but a lot of people are banking on their homes to pay for college educations, retirement, etc. etc.
A big problem with society today, and I think the education system is primarily to blame for this, is that most people don't understand basic economics.
All competent financial advisors have long frowned on using your primary residence as part of your net worth because you still need a place to live. Lately, people have been using their home equity as a "virtual checkbook" without the basic understanding that someday that money would need to be paid back. It's fine to treat rental property that way, because you can always sell it. But if your home is rising in value 25% or more a year, chances are that anyplace you would want to move to is doing the same thing. The notion of selling and "downsizing" is erroneous because almost nobody actually does that (many people do retire to a "smaller" home, but it is often more luxurious than their previous home and just as, if not more, expensive).