The collapse in U.S. home prices over the next few years could be the worst since the Great Depression, with trillions of dollars in home equity evaporating, according to Robert Shiller, a Yale economist who helped create a much-watched home price index.In testimony before the House/Senate Joint Economic Committee, Mr. Shiller said the nation's housing stock is valued at $28 trillion. He estimated that values have already fallen 6.5% from their peak and stand to lose another 7%-13% by next summer. "This amounts to a real loss of home value on the order of trillions of dollars by August 2008," he said, adding that "home price recessions tend to last years." Mr. Shiller, co-founder of MacroMarkets LLC, helped develop the Case-Shiller Home Price Index.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry