Our main findings are as follows. First, it appears that the housing boom has not been driven by unusually loose monetary policy. This is not to say that monetary policy has not been unusually loose, but that to the extent it has been loose, this is not what has been driving spending on housing. Second, the current levels of spending on housing are largely explained by the wealth created by dramatic technological progress over the previous decade. Third, changes in the demographic, income, educational, and regional structure of the population account for only one-half of the increase in homeownership. ... The last finding is that substitution away from rental housing made possible by technology-driven developments in the mortgage market, such as subprime lending, could account for a significant fraction of the increase in residential investment and homeownership. The current spending boom thus may be a temporary transition toward an era with higher homeownership rates and a share of spending on housing that is nearer historical norms.
So, the Chicago Fed believes that the explosion of sub-prime lending is not related to loose monetary policy? They claim that "levels of spending on housing are largely explained by the wealth created by dramatic technological progress over the previous decade", an apparent reference to the tech bubble, but can't seem to connect the tech bubble to loose monetary policy either. Call me a cynic but I don't think the Chicago Fed will ever find an inflated asset that was caused by loose monetary policy.