Evidence for the United States shows that, during the crisis, households with high levels of real estate debt cut down consumption in response to shocks to asset prices, thus amplifying the cycle (King 1994; Mian and Sufi 2014, Jordà, Schularick and Taylor 2015; Mian, Sufi and Verner forthcoming).
Similar effects have been documented for other countries: The loss in consumption during the financial crisis was particularly severe in economies that experienced a large run-up of household debt prior to the crisis. And these same countries experienced the fastest increases in house prices in the precrisis period (Glick and Lansing 2010, Leigh et al. 2012).