What caused the financial crisis of 2007 & 2008?

Causes, Outcomes & Lessons Learned Risky adjustable-rate mortgages and lack of oversight on mortgage securitization created a crisis of global proportions in 2007 and 2008. The worst economic crisis since the Great Depression started with lowly U.S. homebuyers. DKosig for iStockphoto; Canva What Caused the Financial Crisis of 2007–2008?

Why did the housing industry crash in 2007?

Since the financial industry heavily invested in mortgage-backed derivatives, the housing industry’s downturn became the financial industry’s catastrophe. The 2007 financial crisis ushered in the 2008 Great Recession. In February 2007, existing home sales peaked at an annual rate of 5.79 million.

Why did the stock market crash in 2008?

On Sept. 29, 2008, the stock market fell 777.68 points in intraday trading. It was at the time the biggest point drop in history. The immediate cause of the market crash was Congress' initial refusal to pass the bank bailout bill that would stabilize the American financial system after a series of historic shocks.