How did the housing crisis happen?

How did the housing crisis happen?
The US economy is witnessing one of the worst recessions of all times. It is often said that this recession is comparable to The Great Depression. The brunt of mass layoffs, high gas prices, company declaring bankruptcy and ailing banks and financial institutes has severely affected millions of American households. In addition, the housing market crash has surged a wave of massive home foreclosures and has led to tremendous drop in the prices of properties all over North America. The housing bubble that reached its zenith in 2005 started to weaken and crumble in 2006 and is now on the edge of bursting ensuing in a nationwide collapse in the real estate market and sharp decline in the housing prices.

For decades, investment in real estate has always been one of the key profit areas of for banks and other financial institutions. Investing in a house was always considered to be the one of the safest way to safeguard one's money. Owing to this investment fundamental, people continued investing in real estate during the period between late 1990's and 2005 even though the prices were reaching their all time highs. With banks and financial institutes sinking, the condition of housing market has become even more volatile.
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