In the free market, housing prices are determined by the intersection of demand and supply. Any change in the demand and supply conditions will lead to change the housing prices in the market. During the recession of 2008, the consumer used to buy less of goods and services due to fall in consumer confidence index. Since housing is considered as a major expenditure to the American family, people are inclined to buy fewer homes during the period of economic downturn. As a result the demand for housing will come down causing both the prices and sales of existing housing to fall. Moreover, during the economic contraction, investment expenditure on housing will be very less. Thus there will be not much new housing that would cause a fall in