It's not JUST the housing boom that does it. It's forced saving, and getting someone else to pay for your assets. It *can* go horribly wrong if you over-extend but... people DO have to live somewhere.
It's also leverage - you can borrow to buy a house a lot easier than you can to buy stocks. IF rents are stable, and you can get a long-term fixed mortgage (lucky Americans!)... you can have a , virtually, free house in 20 years. Multiply by 3, 4... little risk to you. Ok, after a few houses it gets harder, but still. Who needs more than one $300k house paying them every month to live on, really?!