Home prices are quite sticky, andfears of a major fall in house prices, with all of its attendant negative macroeconomic consequences, typically are not warranted even in extreme foreclosure circumstances.

Most Americans have not experienced any significant decline in the value of their homes, nor are they likely to.

Since the beginning of the subprime meltdown, policymakers, housing experts, and economists have been looking for data that would enable them to predict housing price declines for individual states and for the nation as a whole. To date, no academic study has offered a quantitative basis for evaluating the potential...