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Why did housing prices keep rising during the housing boom?

I understand that it should be the law of supply and demand. "Everyone wanted to buy a house, so housing prices kept rising." But wasn't the reason why everyone wanted to buy a house because housing prices were always going up? That seems like circular reasoning. What made housing prices rise in the first place?

Public Comments

1. Cheap credit is the main reason the demand for housing went up. All sorts of new discounted mortgage rates and programs to get people who couldn't afford houses to suddenly be able to get a mortgage - zero down or interest only mortgages, etc.
2. Creative lending became available. With lenders offering 100% financing, there wasn't much risk in losing a house you don't put anything into, which caused supply to skyrocket. Also, many consumers took advantage of this loose lending with the goal of purchasing the home, flipping it, and making a profit since prices were continually rising.
3. Housing prices kept rising due to a spiral of increased demand. Two main causes of increases in demand: First, speculation. Many people, including those whose business is investing in real estate, simply assumed that housing prices would continue to increase because they always had. Many of these people were rich, and it was the continual price increase that made them rich. Some of them even wrote books explaining how to do this. Many other people saw this as a way to get rich and became investors. The other cause would be easing of credit in the housing market. As credit became easier, many people qualified for housing than would have otherwise. This also drove up demand. This second reason is getting all of the attention now because of the recent problems with the economy, but the first reason actually explains the situation better. The combination, though, is the real answer.