[yareal]

> Which means that when a home is not underwater, the owner has savings (or breaking even, of course, but that is as equally unlikely and is for all intents and purposes considered to be the same as underwater).

What? It doesn't mean this at all. You can have savings and still be underwater. If you have a 3.5% for your mortgage, but the market crashes after you bought at the peak, you can be underwater because your house lost value. And it would be foolish to pay down the loan rather than get a better rate for your savings.

Underwater mortgages are totally orthogonal concepts to savings.

> if you are paying a mortgage, a portion of that is a portion you are saving

I think I see your confusion. Yes, money saved into a home is an asset that you are building over time. However it's a non liquid asset, it's difficult to turn back into cash for, e.g., a surprise medical bill.

Repayment of a loan meets the strict mathematical definition of "savings" however it is typically excluded (as are, e.g., investments). For instance, the U.S. calculation of GDP does not consider repayment to be saving.

Savings are typically held in checking accounts, savings accounts, CDs, and money market accounts. Some people take a portion of their savings and invest them in higher risk items like stocks and bonds, but those are investments.

It's important to decouple the concepts of net worth (or even just worth) from the concept of "savings" because you can be taking actions that increase net worth (e.g. paying a mortgage) that don't increase one's savings. (Though, eventually, if you sell the home you could put any proceeds into savings.)

[randomdata]

> You can have savings and still be underwater.

You wouldn't have savings in the house, but it is possible you have savings elsewhere, sure. However, if you are not underwater (or breaking even), you do have savings in the house, which is what the context speaks to specifically.

> Yes, money saved into a home is an asset that you are building over time. However it's a non liquid asset

There is nothing about savings that implies they must be liquid. If you are saving for a near-term purchase then savings for all practical purposes need be liquid, sure, but if you are young and saving for retirement liquidity is not of terrible importance. You have many decades in front of you to convert it into something else.

> Savings are typically held in checking accounts, savings accounts, CDs, and money market accounts.

Okay, but then we're again back to people not having savings because the returns have generally been poor, even basically non-existent in many cases, for a long, long time. Why would most people have savings in that kind of environment? The market has greatly incentivized surpluses to look elsewhere – especially towards real estate, where returns have been tremendous.

> It's important to decouple the concepts of net worth (or even just worth) from the concept of "savings"

That's for the earlier commenter to decide. It is not on us to prescribe their usage of a term. However, insofar as our discussion goes, it there is no such importance as we have already looked at both angles. No matter which direction you choose to go, the math doesn't add up with the presentation.

[yareal]

> There is nothing about savings that implies they must be liquid.

Here are several examples that disagree. Yes, in a strict Keynesian economic sense it is saving but saving is different from savings, despite the similarity in the two words. (Yes, you are right, this is confusing.)

Examples defining "savings" in personal finance:

https://www.investopedia.com/terms/s/savings.asp

"Savings is essentially cash"

https://www.britannica.com/money/saving

"Saving may take the form of increases in bank deposits, purchases of securities, or increased cash holdings."

https://en.m.wikipedia.org/wiki/Saving

"In terms of personal finance, saving generally specifies low-risk preservation of money, as in a deposit account, versus investment, wherein risk is a lot higher."