The housing bubble in 2004-2006 was partly driven by rapid immigration from Latin America (as was the bubble in Spain itself!), and also by a perception (which turned out false) that coastal zoning constraints were spreading into interior markets. Many Hispanic immigrants were snapping up older ranch houses, allowing native born Americans to move on to bigger McMansions. The immigration crackdown in 2007 dramatically slowed this immigration (as did the worsening economy.) Population growth estimates going several years forward fell sharply, hurting housing speculators. Ground zero of the sub-prime bust is in working class areas of the Southwest and Florida. Any guess as to who bought homes in those areas? In addition, after 2006 nominal GDP growth slowed gradually, and then very sharply, to a rate far below the level any rational investor could have anticipated in 2006. Even today, few people seem to realize the impact that going from plus 6.5% to negative 6.5% nominal growth has on housing prices. This didn’t trigger the collapse, but it dramatically deepened it.