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Is the housing slump going to put the economy into recession? What are possible solutions?

I am writing a paper for my econ class and am totally brain farting. Can't find good articles on this topic. I need to list reasons why the housing market is in a slump, is it going to put the economy into recession any why? And possible solutions. Please share your thoughts, they will much appreciated!

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1. The problem started in the early 2000s when rates were at historic lows. When mortgages are cheap, people can be approved for larger $ amount loans, but the catch is, they were taking out the cheapest loans (adjustable rate). Meanwhile, demand is high for loans, Bush is praising himself since home ownership is at an all-time high, and interest rates are going up. Also, people are paying way too much for real estate they shouldn't be buying, which causes a housing bubble (prices are higher than they should be, but who cares because we can afford it?). Eventually, the fixed rate time on these adjustable rate mortgages ends, and people's rates increase A LOT. When once a $500,000 loan's payment was $2500 a month, now it's over $3200. Naturally, when your loan increases $700 a month, you can't spend as much on food, gas, dining out, movies, so you cut back. Companies lose a lot of business, and have to cut jobs to stay profitable. So the people who are paying $3200 a month now find themselves unemployed and unable to pay the mortgage. Their loan forecloses, now the bank owns it but banks aren't interested in holding property, they have to sell it quickly. So, they slash the price and take a loss (hence, the credit crunch). Now the property prices in your neighborhood are going down since anyone can buy the foreclosed properties for cheaper, your home's value starts going down. So, naturally, a recession will help correct the economy but the value of the dollar NEEDS to increase so if prices go down, it won't hurt businesses. Therefore, the FED needs to raise the funds rate, effectively taking money out of circulation so prices can go down without bankrupting more businesses. Also, more demand for mortgages will help interest rates on those loans rise.