If house prices overshoot to the downside, it would put the economy in a precarious position, according to the economist.
The White House and Congress should come together on a plan "to put a floor under these house prices," Feldstein said.
He elaborated that he favored a proposal to have the federal government replace existing mortgages with new loans to reduce the risk that homeowners would be left with mortgages that are worth more than their homes as prices drop.
This plan would take the risk of a housing market downturn "off the table," Feldstein commented.