The Austrian School of Economics, which is a school of thought, not a literal university, prefers to correlate economic expansions and contractions to the expansion and contraction of the money supply and manipulations of interest rates. I agree with this part of the theory, but I think there are additional pieces that they need to add to complete the story.
I continue to believe that interest rates were a secondary factor as a cause for the housing boom. However, Robert Murphy makes his case at Mises.org in an essay titled "Evidence that the Fed Caused the Housing Boom". It's a good read, but if the density makes you leery, I have included the most compelling graphic below. It compares 30-yr mortgage rates to the year-over-year changes in the S&P Case-Shiller home price data.
Because of this evidence, I am willing to update my thoughts on the housing bubble process to include a few basic time steps.
1. Housing supply restrictions cause growing prices
2. Extrapolation of rates of return (speculation)
3. Low mortgage rates allowed more borrowing
4. Incorrection securitization allowed speculation to grow more rampant