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LOS ANGELES — Home prices have dropped 23 percent in Torrance, Calif., and Doug Gylfe still can't afford to buy a home. Congress isn't helping.

That's the problem for the nation's lawmakers and millions of Americans priced out of homeownership: Any rescue policy to stem foreclosures could artificially prop up home prices and perpetuate the affordability crisis in many major cities.

"In spite of the downturn in the housing market … affordability continues to be the No. 1 housing challenge," said Rachel Drew, research analyst at Harvard University's Joint Center for Housing Studies.

In Torrance, the coastal city 16 miles south of Los Angeles where Gylfe lives, the median home price in his ZIP code has fallen from a peak of $830,000 two years ago to $636,000. But that's still twice what Gylfe can afford on his salary as a real estate appraiser.

"I've lived here since I was about 10 years old, so I really like it," said Gylfe, 53. "I would stay here in a heartbeat if I could afford something."

Lawmakers, however, appear more focused on the negative economic consequences of falling home prices than the benefits.

Congress is, in a way, facing a real estate Hydra: declining home prices, rising foreclosures, tighter lending standards, higher interest rates and industry layoffs. Yet while trying protect the economy and honest homeowners who were suckered into bad loans, Congress may cut off one of the serpent's heads only to see two grow back.

"It's very difficult, from a practical perspective, to implement policy prescriptions that are (metro) focused," said Sam Chandan, chief economist for Reis Inc., a New York-based real-estate research firm.

While most economists agree the imminent threat to the economy and the financial system are great, Edward Leamer says, "The folks who sat on the sidelines, they should feel legitimately annoyed that the more speculative folks who bought homes they couldn't afford are going to be bailed out or helped by the federal government."

Leamer, a senior economist at the University of California, added, "And these other folks (who) acted responsibly and didn't get in over their heads and decided they didn't want to buy the home, they're not getting any benefit."

Last week the House and Senate were patching together a bill that would let the Federal Housing Administration insure up to $300 billion in new loans to help struggling homeowners avoid foreclosure, among other initiatives.

Lawmakers also are considering earmarking $3.9 billion in funding to help buy and rehabilitate foreclosed properties, giving first-time buyers a tax credit up to $8,000, and propping up mortgage giants Fannie Mae and Freddie Mac.

The initiatives could help thousand of homeowners refinance their mortgages and avoid foreclosure, and sop up some of the bank-owned properties that are driving down home prices in some neighborhoods.

But by supporting home prices, the government is also short-circuiting a correction in home values that some say is necessary to bring prices closer in line with incomes for most working-class families.

The median price of an existing home peaked two years ago at $230,100. As of May, it had fallen about 9 percent to $208,600, according to the National Association of Realtors.

The housing-price reductions have helped make many real estate markets more affordable, but experts say they are not deep enough in many major metro areas to narrow the affordability gap for policemen, teachers, nurses, retail workers and those in many other vital service jobs.