A disturbing debate is under way over the single most important economic decision most families ever make, a debate in which it is quite likely that both sides are wrong. The debate is over what is going to happen to home prices.

Ever since a pair of Harvard University researchers took a look at the links between birth rates and housing costs and concluded that the end of the baby boom was going to lead to lower home prices, the housing industry has been in turmoil.You can't pick up a home building trade publication, a glossy home magazine or a newspaper real estate section these days without reading about the great debate over the future of home prices.

"NO, Real Estate Prices Will NOT Collapse in the 1990s," the National Association of Home Builders proclaims in a special report that is receiving wide circulation.

The home construction industry's lobbying group and a substantial number of economists - not all of them beholden to the builders - offer persuasive arguments against the demographically driven downtrend forecast by Harvard's N. Gregory Mankiw and David N. Weil.

Mankiw and Weil's basic premise is hard to dispute. People between the ages of 20 and 40 provide the bulk of the demand for homes, they point out.

After the fecund '50s and the swinging '60s, the U.S. birth rate began to slow down in the early '70s. During this decade, there will be fewer people turning 20 each year. As the number of people in the age 20-to-40 category declines, so will the demand for housing.

Based on this solid footing in demographics, the researchers then calculated how the reduced demand for housing will affect prices.

They looked at what happened to home construction costs during previous periods when the demographics of housing were similar to what is occurring now and forecast what will happen this time.

Their projections are shocking: Real housing prices could fall as much as 3 percent a year over the next 20 years. House prices - adjusted for inflation - could drop as much as 47 percent.

That forecast has terrified the home builders, triggering a potent counterattack. It's not the demographics that drive the price of houses, the builders say, it is the cost of construction, financing, planning, permits, lumber, land and everything else that goes into building a new home.

None of those costs is going down, certainly not by 47 percent, the builders stress. Since the cost of building a new home isn't going down, they say it's absurd to think that home prices will plummet.

The forecast of a 47 percent fall has terrified homeowners as well. Part of the reason they're scared is that they don't understand the forecast.

They don't catch the distinction between "housing prices" as you and I would discuss them and what economists term "real housing prices" - in other words, prices adjusted for inflation.

The Harvard study does not suggest that the house you buy today will sell for 47 percent less in 20 years.

What the study suggests is that when you factor in inflation, houses are likely to be relatively less costly in 2010. Inflation may double your income in the next 20 years, but it will not double house prices. If inflation adds 5 percent a year to the cost of living, but the cost of building a house goes up only 2 percent, the "real cost" of housing actually comes down, even though the price goes up.

That's not the same as a decline in prices, but it's not what homeowners have gotten used to in many areas of the country.

Somewhere between the 20 percent a year gains that builders like to talk about and the frightening 47 percent plunge lies the truth about where home prices are going.