The Housing Bubble Bursts The housing bubble of the early twenty-first century burst in 2006. By 2007 the owners of this Miami home could no longer afford to pay their mortgage, and like millions around the country they lost their home. Risky lending practices, including subprime mortgages and real estate speculation, triggered the housing collapse. California, Florida, Michigan, and Nevada posted the highest rates of foreclosures. Joe Raedle/Getty Images