This is the part of the housing market that is at risk. There are a lot of loans out there that are less than 10% equity, including a rather large 2nd mortgage market. Now, most of us have at least 20% equity and can survive a bad market better than others can. But, if things get tight in the job market, the housing situation will quickly grow worse for many people.
The stock market isn't directly connected to the consumer market, but it isn't disconnected either. People have savings in the markets. If the value goes down enough, they will view it as threatening and will tighten up their spending. This will be the downward effect that could tank the economy.
I've lived through what amounted to a housing depression over about a five year period in my local area. Lots of people lost lots of money. You couldn't sell a house. Those "unsellable" houses are now selling for an average of almost $200,000. Granted, they may be selling for $150,000, $100,000, or even $50,000 next year. But they won't go to zero value, barring something we didn't see even during the depression. Everyone has to live somewhere.
Of course, you never know.
Those kind are probably safest for the borrower. The more equity you have, the more of its depositors' money the bank can reclaim by foreclosing.