Cristiano Ronaldo and Marcelo were on target to give the defending champions a comfortable away victory in Wednesday's first leg.
Howedes was part of Schalke's back three at the Veltins Arena and felt they had done well to limit Real, but acknowledged they now face an uphill task to qualify.
"We defended well overall," said the 26-year-old. "But of course it's a brutal blow to be punished by Real's two chances.
"We fought and were very industrious. We gave Real hardly any opportunities to score and that will be our goal in Madrid as well.
"We are not in a good position, but everything is possible in football and we will aim to give a good account of ourselves."
To add to Schalke's worries they saw star striker Klaas-Jan Huntelaar limp off in the first half with a muscle problem, leading to youngster Felix Platte making his European debut.
Coach Roberto Di Matteo expressed concern over Huntelaar's injury.
He said: "We are not satisfied with this result. We had a few chances, especially in the first half. Then we also hit the crossbar and if that shot had gone in, I am sure the match would have developed differently.
"Unfortunately we still lack a few alternatives up front and we also lost Klaas-Jan Huntelaar to injury."
