The broad-based increases in both mortgage debt and real estate assets have important implications for theories of the housing boom. A successful model of the boom must explain the stable cross-sectional distributions for debt and real estate assets, at the same time that the model explains the sharp increase in house prices. A theoretical section in this paper shows that to be consistent with the data, any explanation of the boom needs two elements: (1) an exogenous shock that increases expected house price growth or, alternatively, reduces interest rates and (2) financial markets that endogenously relax borrowing constraints in response to the shock. The data therefore imply that the large increase in subprime lending during the boom was not an exogenous shock driving house prices higher, but rather an endogenous response on the part of lenders to higher house prices. Lenders were happy to lend to low-income borrowers using subprime mortgages, because rising house values meant that these mortgages would be secured by rising value in the mortgages’ underlying collateral. In extending these subprime loans, lenders kept the distributions of mortgage debt and assets from tilting toward the rich.