But even in that episode, real GDP contracted less than 3 percent and cumulative job losses were less than 3 million. The recent contraction in the housing sector has also been the most severe episode since the Great Depression. National house prices have fallen 33 percent in nominal terms since their peak in 2006.
In contrast, home prices dipped only 2 percent in the early 1990s downturn, and they did not decline at all in the early 1980s recession. The recent drop in housing market activity also has been dramatic. Home sales plunged more than 50 percent from peak to trough, while housing starts plummeted more than 75 percent.