And if you want to go studying Adam Smith for some 'invisible hand', you first need to understand the 'Theory Moral Sentiments'.   You are correct in that it's what they value.  This is the monetary aspect + other aspects.  It's clear to me the reason that people with underwater houses don't default because of the credit history damage, social stigma and other feelings.  Plus, they may consider walking away equivalent to selling at the bottom of the market.<p>The article, overall, adds very little to the discussion because it approaches it from the wrong angle.