Yes and no, and this is a big part of the problem: young adults in the US are taught that their primary residence is/will be their biggest investment. So you get this weird set of fears that encompasses the worst of both.

The house-as-residence aspect makes them fearful that you won't make your mortgage payments, or your mortgage will end up under water, and the bank will foreclose on you and you'll be homeless. The house-as-investment aspect makes them fearful that they'll take a loss or even break even come sale time, and then their retirement nest egg will be weak.

So I agree that fundamentally yes, people are buying a house to live in, but it's a lot more loaded than that.

If housing costs were more reasonable, perhaps we could turn the tide against this "primary-home-as-investment" attitude, which I believe to be counterproductive.