Should home loans be guaranteed by the U.S. gov't if the entire market falls?

Anyone today would be insane to buy a house knowing it could fall at any time. Home prices have fallen, but they could fall much, much further. In the early 1990s, a typical 2,000 sq ft. house cost in my area was $89,000 vs. $220,000 today. The price to build a house, minus permits, restricted number of contractor licenses and special laws, is very cheap, especially with the illegal labor used. A 2,000 sq ft site-built house could be built in a free market for $50-$60K today. I know someone who just built one for $40k using illegal labor. If the U.S. gov't doesn't back today's home loans for buyers of resale houses, 95 percent of all houses on the market could fall into default, since these properties could not be sold for what was paid + home equity loan due. If that happened, the U.S. economy may collapse as an entire new cl of homeless would arise. Should a U.S. gov't guarantee be put in place for home resale loans?