Falling US home values and an increase in debtors who were unable to make loan repayments were the main causes of the Great Financial Crisis. The mid-2006 peak in US house prices corresponded with a sharp increase in the supply of recently constructed homes in certain regions. The percentage of borrowers who were unable to make their loan payments increased as home prices started to decline. Due to the fact that the percentage of US householdsboth owner-occupiers and investorswith significant debts increased significantly during the boom and was higher than in other nations, loan repayments were especially sensitive to changes in housing prices.

P (F | low demand) = [x.]

P (F | medium demand) [xi.

P (F | high demand) = [xii.]