Home prices have started to fall in cities throughout America and these declines may augur more serious price drops. While this isn’t exactly good news, it isn’t entirely bad news either. The real danger is not that the nation’s homes will become more affordable, but that the government will do something foolish in a quest to artificially maintain high housing prices.

As long as there has been housing, there have been housing cycles. In the 1920s, A. E. Lefcourt was the greatest developer in New York, and hence the world. He built dozens of skyscrapers and moved the garment industry out of fire trap lofts into modern buildings. He gave his teenage son a $10 million building to encourage his interest in real estate. In 1929, after the crash, Lefcourt was certain that the boom would continue and declared that “1930 will be a great building year.” He was wrong, and as prices plummeted, his fortune sank from $100 million to $2,500.

Real estate booms are usually followed by busts. On average, when prices in a city increase by $100,000, relative to the nation and local long-run trend, during one five year period, prices go down by $32,000 during the next five years. For every 10% that a city’s prices grew in the 1980s, prices fell by 5% in the 1990s. Nothing is housing is perfectly predictable, but if you see a huge price boom, then you should expect a correction as new supply comes on market and as local economic conditions cool off.

So far, the biggest price declines have been in metropolitan areas that never had the fundamentals to support high prices. Between 1960 and 2000, prices in Las Vegas had stayed moderate, despite fantastic urban growth, because they were no limits on housing supply. Between 2001 and 2006, the city’s prices rose dramatically, ignoring the ease of building in a relatively unregulated desert. In the past year, Las Vegas’ prices have dropped by more than 7% and there has been a similar decline in other Sunbelt boom towns with essentially unlimited housing supply. There is a pretty good chance, though, that price declines will also spread to places with stronger demand and restricted supply, like New York.

There are good reasons to be happy that homes have become more affordable. In the past six years, rising housing prices have increased the cost of living for millions of Americans. It won’t be such a bad thing if prices revert to historical norms. We all start our lives “short” housing. As housing becomes cheaper, it becomes easier to buy the necessity of shelter. If New York City’s prices dropped, then more ordinary people could experience the city. Even most homeowners won’t suffer too much from a temporary downturn because eventually there will be another boom.

What about the threat a housing decline will push America into a recession? Some people spend their housing wealth and as prices decline there will be less of this spending. Moreover, declining prices have already produced a collapse in new building. The annual permit rate has dropped to 1.2 million units this October from more than two million units in 2005. The economy seems to be headed downward and declining prices will only exacerbate that trend.

But despite the fact that recessions are a bad thing and that declining prices can contribute to a recession, it doesn’t follow that we want government intervention to boost prices. I wasn’t crazy about poorer Americans borrowing like mad on their homes to buy more stuff. I am a friend of the construction sector, but I don’t think it would be terrible for us to work through the vast, existing inventory of houses. I am skeptical that an artificial boost to housing prices can do much to offset economic decline.

We are dealing with the after affects of a great subprime lending boom that did much to push prices up in the first place. We must respect creditors’ rights so that lenders will still make loans in the future to poorer people with imperfect credit ratings. The worst thing that the government could do would be to rush to restrict foreclosures in the quixotic hope that this would shore up prices. There is nothing wrong in letting prices accurately reflect demand and supply and there is nothing right in interfering with the market to artificially prop up the housing sector in the vain hope that this will repeal the business cycle.

Mr. Glaeser is a professor of economics at Harvard University and a Manhattan Institute senior fellow.