One reason the housing bubble occurred is because:

Question

Quizplus · Accepted Answer

The recency effect, which is the tendency for people to base their judgments on information that is most recent, played a significant role in the housing bubble. As housing prices began to rise rapidly, people assumed that the trend would continue, and they overvalued homes. This led to homeowners taking out risky mortgages and investors buying into the market at inflated prices, ultimately contributing to the collapse of the housing market. The securitization of mortgages and the herd instinct also played a role, but the recency effect was a primary driver of the housing bubble's formation.

One Reason the Housing Bubble Occurred Is Because