U.S. homeowners lost $3.3 trillion in home value in 2008

Also, real estate equity has declined $6.1 trillion -- or by a value equal to about 40% of the U.S.'s roughly $14 trillion economy since home values peaked in Q2 2006.

Home values have dropped for eight consecutive quarters and economist Peter Dawson told BloggingStocks Tuesday it doesn't take an MIT mathematician to figure out why they have.

"In retrospect, we can now see that there was a large amount of speculation and a massive overbuild in housing. Add the bursting of that bubble to the rise in foreclosures resulting from the long recession and you have a recipe for large home price declines, which is what we've seen these past two years," Dawson said.

The key to ending the slide in home values? "End the rise in foreclosures by creating jobs in the economy. It's very hard for foreclosure rates to decline amid large job losses," Dawson said. The U.S. economy lost more than 2.6 million jobs in 2008 and unemployment has risen to 7.2%, the nation's highest jobless rate in 16 years.

Housing / Economic Analysis: A major, national mortgage refinance program for at-risk homeowners would also help put a floor under housing prices, Dawson added, and the Obama administration is currently considering a plan whereby the government would guarantee mortgages modified by lenders. Stay tuned.