Which U.S. housing-loan market was at the center of the 2007–2008 financial crisis?

The subprime mortgage market was at the center of the 2007–2008 financial crisis.

Subprime mortgages were loans made to borrowers considered more likely to have difficulty repaying. During the U.S. housing boom, lenders originated large numbers of such loans, including adjustable-rate mortgages. Many were bundled into mortgage-backed securities and more complex financial products that were sold to investors worldwide.

When U.S. house prices stopped rising and then declined, delinquency and foreclosure rates increased. Falling property values reduced the collateral behind loans, while losses spread through banks, investment funds, insurers, and structured-finance markets.

The stock-market crash was therefore linked to a credit and housing breakdown rather than being an isolated share-price event. The S&P 500 reached a pre-crisis closing high of 1,565.15 in October 2007 and later fell about 57% to its March 2009 low.