--and that was a good thing. Houses being built and money loaned isn't something that should stay at a 'norm' because folks have kids and America grows. In the mid '00s the number of homes built topped the previous peak of three decades earlier by 20%, and during that time the U.S. population had increased by 50%. imho it's not economic growth ten years ago being problem, it's the econ collapse of '09 that needs to be fixed.
I don't think you can separate the two. Housing starts exploded largely because of the complete collapse of lending standards. Pizza delivery guys were getting jobs as mortgage brokers, and making GREAT money.
The build-up of bad debt was unprecedented, and eventually created a near complete collapse of the financial system. It was, IMO, very close to completely falling apart. Even GE couldn't get the daily credit needed to run their business.
That chart reflects how absurd things got... and, how severely it has corrected.