Prior to the crisis, neither policymakers nor investors anticipated the impact of falling housing prices on the U.S. financial system.

To see whether similar risks exists today, plot since 1990 real housing prices: namely, the Case-Shiller U.S National Home Price index divided by the level of consumer prices (FRED code: CSUSHPISA and CPIAUCSL ) Discuss the result and explain why housing matters so much for the financial system.