From 1997 through 2006 the price of the average American home increased by nearly 125%. In the same time period this meant the home price ranged from 2.9-3.1 times the average household income. This led to fast and loose lending which include adjustable rate mortgages. This meant that once the economy crashed, up to 9 million homes were foreclosed on in one year, the average year normally sees roughly 1 million homes in foreclosure. In total, that represented $450 billion in losses from the banks.
