Causes of the 2000s United States housing bubble
Speculative fever
### Speculative fever

[thumb\|none\|600px\|Total US derivatives and total US wealth 1995–2007 compared to total world wealth in the year 2000](/wiki/File:US_derivatives_and_US_wealth_vs_total_world_wealth_1995-2007.gif "US derivatives and US wealth vs total world wealth 1995-2007.gif")
The graph above shows the total notional value of derivatives relative to US wealth measures. It is important to note for the casual observer that, in many cases, notional values of derivatives carry little meaning. Often the parties cannot easily agree on terms to close a derivative contract. The common solution has been to create an equal and opposite contract, often with a different party, in order to net payments ([Derivatives market\#Netting](/wiki/Derivatives_market%23Netting "Derivatives market#Netting")), thus eliminating all but the counterparty risk of the contract, but doubling the nominal value of outstanding contracts.

As [median](/wiki/Median "Median") home prices began to rise dramatically in 2000–2001 following the fall in interest rates, speculative purchases of homes also increased. *[Fortune](/wiki/Fortune_%28magazine%29 "Fortune (magazine)")* magazine's article on housing speculation in 2005 said, "America was awash in a stark, raving frenzy that looked every bit as crazy as dot\-com stocks." In a 2006 interview in *[BusinessWeek](/wiki/BusinessWeek "BusinessWeek")* magazine, Yale economist [Robert Shiller](/wiki/Robert_Shiller "Robert Shiller") said of the impact of speculators on long term valuations, "I worry about a big fall because prices today are being supported by a [speculative fever](/wiki/Speculative_fever "Speculative fever")", and former NAR chief economist David Lereah said in 2005 that "\[t]here's a speculative element in home buying now."[\[broken footnote](/wiki/Wikipedia:Footnotes "Footnotes")] Speculation in some local markets has been greater than others, and any correction in valuations is expected to be strongly related to the percentage amount of speculative purchases. In the same *[BusinessWeek](/wiki/BusinessWeek "BusinessWeek")* interview, Angelo Mozilo, CEO of mortgage lender [Countrywide Financial](/wiki/Countrywide_Financial "Countrywide Financial"), said in March 2006: 
The chief economist for the [National Association of Home Builders](/wiki/National_Association_of_Home_Builders "National Association of Home Builders"), David Seiders, said that California, Las Vegas, Florida and the Washington, D.C., area "have the largest potential for a price slowdown" because the rising prices in those markets were fed by speculators who bought homes intending to "flip" or sell them for a quick profit.
Dallas Fed president Richard Fisher said in 2006 that the Fed held its target rate at 1 percent "longer than it should have been" and unintentionally prompted speculation in the housing market.

Various real estate investment advisors openly advocated the use of no money down property flipping, which led to the demise of many speculators who followed this strategy such as [Casey Serin](/wiki/Casey_Serin "Casey Serin").

According to a 2020 study, the main driver behind shifts in house prices were shifts in beliefs, rather than a shift in underlying credit conditions.


Are there any correlations between speculative fever and other economic indicators, such as GDP growth or inflation?