The housing finance market is a prime example of what happens when the GOV tries to "fix" things - a classic case of unintended consequences. The GOV mandated that "redlining" was "unfair", and mortgage lenders had to make riskier loans, so they did, and the loans went sour, and the mortgage backed securities they went into turned brown and started smelling bad. Nobody buys MBS, nobody gets to buy and finance a house, and the housing market collapses. This is somewhat simplistic, and there are other factors, like crazy real estate speculation in some markets, but even that was fueled by risky mortgage loans.

The real reason for any boom-bust cycle is insufficient money supply. They let the banks control the money supply, and they have no incentive to supply enough for the economy to carry out all desired transactions. This leads inevitably to unsold inventories and business bankruptcy as a result.