I would say that many of the aforementioned reasons “set the stage” for the housing bubble (e.g. CRA, GSEs, DPA, repeal of Glass-Steagall).
But the “but-for” cause of the bubble rests with greenspan for holding rates below 2% for 3 years (Dec ’01 – Sept ’04). Everything else was kindling, the Fed lit the fire.
The low FFR triggered BOTH SUPPLY and DEMAND: It triggered supply of easy money AND it forced billions of dollars of investments into higher paying securities. These large pension funds have to earn 6% or better to make good on the promises of the last 20 years; when the FFR went down to 1%, this was a nightmare scenario for meeting future defined benefit obligations.
(I feel that) the thing so many poeple don’t realize is that if no-one was buying the mortgage securities, you couldn’t have had such a large bubble. It took a combination of people willing to take on the debt PLUS people willing to buy the debt–and the willingness to buy the debt grew because the FFR was below the rate of inflation.
