Turmoil in the housing market has led to fears that home prices will drop precipitously, particularly if foreclosures force large numbers of homes onto the market in the coming year. Recently, these fears have driven financial stocks down and led to the government rescue of Fannie Mae and Freddie Mac. But the projected losses have been wildly exaggerated. Most Americans have not experienced any significant decline in the value of their homes - nor are they likely to . . .

But fears of a huge loss in home values for most homeowners ... and fears of the devastating losses by financial institutions that would accompany them, are greatly overblown.

Three economists writing in the Washington Post, Aug 2008.

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