Bank analyst Meredith Whitney says home prices have another leg to drop, perhaps 25 percent.

“Fourth quarter, then you see another leg down,” she told CNBC.

"No bank underwrote a loan with 10 percent unemployment on the horizon," Whitney said.

"I think there is no doubt that home prices will go down dramatically from here, it's just a question of when."

Unemployment already stands at 9.7 percent, and Whitney doesn’t see that improving anytime soon.

"If you look at the drivers for unemployment I don't see that reversing very soon," she said.

If consumers started spending more, "that would be a game-changer."

But it’s highly unlikely consumers would suddenly open up their wallets in the middle of a recession, Whitney points out.

"A lot of themes are constant,” she says, such as, “the U.S. consumer and small business don't have any credit; credit is still contracting."

Whitney also sees another leg down for bank stocks.

“You don’t have a negative catalyst now, because the government has the banks in its lap and is coddling them,” she says.

But “when the government stops buying assets, who steps in? Core earnings of these banks still aren’t what people expect.”

Not everyone is so pessimistic on home prices.

Karl Case, co-founder of the S&P/Case-Shiller Home Price Index, told Moneynews, “House prices are … up now for two months in a row, which means I think we’re at least at something like a bottom.”