Why the housing bubble caused a crisis?and what?s different now
The economy is booming. The stock market regularly hits new all-time highs. Unemployment is at record lows. Aside from a small recent downturn, the housing market is as hot as ever.
In many ways, the world has moved on from the cataclysmic 2008 financial crisis, triggered when sloppy mortgage lending popped the massive U.S. housing bubble. But the scars of the crisis are still visible in the American housing market, which has undergone a pendulum swing in the last decade.
In the run-up to the crisis, a housing surplus prompted mortgage lenders to issue loans to anyone who could fog a mirror just to fill the excess inventory. But lending today is stricter. It is so strict, in fact, that some in the real estate industry believe it?s contributing to a housing shortage that has pushed home prices in most markets well above their pre-crisis peaks, turning younger millennials, who came of age during the crisis, into a generation of renters.
?We?re really in a hangover phase,? said Jonathan Miller, CEO of Miller Samuel, a real estate appraisal and consulting firm. ?Just because prices are rising doesn?t mean we?ve recovered. [The market] is still distorted, and that?s because of credit conditions.?

How did this happen" Start with shady mortgages
When lenders and banks extend a mortgage to a homeowner, they usually don?t make money by holding that mortgage over time and collecting interest ...