TheRealMafoo on 31 March 2009
The problem started in 1997, the second the government increased the demand for homes by 10% (incentivizing sub prime loans to get the number of home buyers from 60% to 66%).
This caused the demand for homes to go up, builders started making more homes, so government incentivized more, and the percentage went up even more (to 75%).
The home market fell for one reason, and one reason only. Builders caught up. When the supply finally met demand, people could no longer borrow against the increased value of there home to pay for a loan they should have never had in the first place.
So this problem started in 1997, it just took 10 years for builders to build enough homes.
