Why- home/mortgage prices?

The problem isn’t the rates. The problem was with the Down Payment percentage which was often as low as 0 %. This led people who weren’t really responsible to get housing loans. Many of these loans subsequently faltered requiring foreclosure. But, the banks weren’t able to “sell” the loans because there was no Positive value to the loans. This led to a housing crisis in the loan industry which has led to the financial problems that we now have.

    I hope you do not take offense,
    To that that's gone before;
    'Tis only that it's my two-cents,
    And not one penny more. §;o)

This is a complicated question. People didnt know they wouldnt be able to pay for their houses, they just bought into the american dream, they wanted to own a house… In addition the government (I.e. Bush) gave tax cuts to homeowners which was another incentive to buy a house. To top it all off, unethical lenders put really high interest rates on the loans and so the homeowners ended up drowing in debt…