What factor contributed to the 2007 real estate bubble?
A. Rising interest rates
B. Monetary policy encouraging low-cost loans
C. Reduced homeownership
D. Increased stock diversification

The main factor contributing to the 2007 real estate bubble was monetary policy encouraging low-cost loans, which allowed borrowers with poor credit to access mortgages. This led to speculative buying and inflated home prices that could not be sustained. When interest rates eventually rose, many borrowers defaulted, resulting in a financial crisis.
;

Answered by Anonymous | 2025-07-07

The 2007 real estate bubble was largely caused by monetary policy that encouraged low-cost loans, leading to an excessive increase in home prices due to speculation and subprime lending practices. Low interest rates allowed borrowers with poor credit to obtain mortgages, thus fueling the housing demand. When interest rates eventually rose, it resulted in widespread foreclosures and the collapse of the bubble. ;

Answered by GinnyAnswer | 2025-07-07