After the tech bubble burst, people were leery about putting money into the stock market, and instead poured money into housing. It was easy to get financing — too easy, as it turned out. The inventory of homes for sale was low, and demand was high. When the demand is high and supply is low, prices go up.

Rising prices created a sense of urgency; buyers couldn’t buy fast enough. They wanted to own as soon as possible in order to take advantage of home-price appreciation that was rising rapidly in many areas.

This resulted in the housing bubble that burst in 2007. The housing market has been struggling ever since. Nationally, home prices have declined 30 percent to the level they were in 2002. Even low interest rates, coupled with low home prices, haven’t been enough to ignite home sales.

Part of the problem is that there is still too much inventory of unsold foreclosure properties, mostly located in areas where people can’t find work. Another factor holding the market back is the stringent mortgage qualification requirements. In the San Francisco Bay Area in 2006, more than 50 percent of home purchasers bought using loans that didn’t require conventional qualification, such as stated-income or no-cash-down mortgages. Those loans aren’t available today.

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