Gordon Brown says the slump in the UK housing market is "containable", after the sharpest monthly decline in prices since the early 1990s.
The prime minister said a 2.5% fall in March, recorded by the Halifax, should be seen in the context of 10 years in which property prices had risen 180%.
He acknowledged a "difficult situation" but said the UK was better placed to cope than in previous slowdowns.
The Conservatives accused Mr Brown of economic "incompetence".
The 2.5% house prices fall in March was the biggest monthly decline since September 1992, the Halifax said.
It puts prices 1.1% higher than they were a year ago, the slowest annual growth rate for 12 years.
In an interview with BBC political editor Nick Robinson, Mr Brown said: "We've seen house prices rise by about 180% over the last 10 years and they have risen by about 18% over the last three years, so a 2.5% fall is something that is containable."
He cited the US credit crunch, which has led to falls in property prices there, saying the whole world was "in a difficult situation arising from what's happened in America".
But the number of UK homes being repossessed was a "fraction of what happened in the early 90s".
He said: "We will keep looking to see what we can do to be on the side of homeowners and homebuyers and also of course businesses seeking funds for investment."
Ministers would meet the Council of Mortgage Lenders to "discuss the kind of arrangements" needed to help homeowners and homebuyers, Mr Brown added.
The Halifax said nine of its 12 UK regions had recorded an increase in house prices over the past year, the biggest being Scotland's 5.3% and Northern Ireland's 3.5%.
Three had experienced a fall: south-west England by 3.3%, the West Midlands by 3.7% and Wales by 5.3%.
Meanwhile, the International Monetary Fund has warned that potential global losses from the credit crunch will reach $945bn (£472bn) and could be even higher.
Shadow chancellor George Osborne said the latest UK housing figures meant millions of homeowners were being "confronted with the consequences of Gordon Brown's economic incompetence".
He added: "Gordon Brown failed to prepare. He borrowed in a boom and allowed the debt bubble to grow. Now the whole country is paying the price."
Liberal Democrat Treasury spokesman Vincent Cable said the falling market would be a welcome "correction" for first-time buyers struggling to get on the property ladder.
But he warned that up to three million people who borrowed 90% or more of their property's value over the last year or so "have been sucked into negative equity".
He added that the credit crunch had meant mortgage rates had not been cut despite interest rate cuts, meaning many people were "finding it impossible to service their mortgage".
Better UK forecast
However, in his BBC interview Mr Brown said the government had taken the correct "long-term decisions" on the economy, contrasting the position now to the global downturn in the early 1990s.
He added: "If you look back 15 years... we had 15% interest rates, 10% inflation, rapidly rising unemployment, public spending having to be cut, taxes having to rise dramatically.
"If you look at this situation, because we've got low inflation we can cut interest rates, because we have had low debt, we can afford to keep our public spending programme in line and to borrow at the right time to help the economy come though difficult times.
"And that's why people are forecasting that British growth will be higher than growth in other countries who are equally affected by what's happening around the world."
Mr Brown's interview comes at a difficult time for the Labour leader, with a Populus opinion poll for the Times suggesting that the Conservatives had 39% support, compared with 33% for Labour and 17% for the Liberal Democrats.
He has also faced criticism from within his own MPs at Westminster - with 74 signing early day motions expressing concern about his decision to axe the lower 10p starting rate of income tax.
Asked if he would rethink the 10p rate, Mr Brown said it was one of a package of measures in the last Budget which, as a whole, saw those on the lowest incomes gaining the most.
Asked more generally about his position, he said being in government was about taking the right "difficult long term decisions" and that over "the next few months" people would see the results.
He denied "dithering", saying he had made the big decisions on nuclear power, airport expansion and climate change - adding that his government "would not play to the gallery" and would be judged in the long term.