In a severe stress scenario, what is the estimated percentage drop in US home prices?

In severe stress scenarios, particularly when assessing potential economic downturns or financial crises, analyses often project significant impacts on housing markets. A drop in U.S. home prices by approximately 36% reflects data from past economic events, like the 2008 financial crisis, which experienced sharp declines in home values. This estimation takes into account various factors such as increased foreclosure rates, heightened unemployment, and reduced consumer confidence, all of which typically contribute to a steep decline in housing demand and, consequently, market prices.

The 36% figure represents a reasonable consensus among economists and analysts regarding the potential extremities of market fluctuations during severe economic distress, highlighting how fragile the real estate market can be during such times. Other percentages presented in the choices may not fully encapsulate that level of severity backed by historical data, making 36% the most representative figure in this context.