The terms "loose," "tight," "passive," and "aggressive" can be used to describe not only individual players but an entire game. The phenomena I describe below are more apparent and relevant in serious casino games, but you will see some of these factors at work in a real home game too.
If you sit down with a table of good, experienced players, the game will usually be tight and aggressive. The participants will be selective in the hands they play, because they will not allow themselves to part with their chips when they don't have some kind of angle to an advantage.
When they are in a hand, they will not hesitate to raise and re-raise if they determine that it will help them shape the hand to their benefit.
At a loose table, players will call with many more starting hands. As a result of the large number of hands in the game, good starting hands will hold up much less often, and the luck of the draw will have a bigger effect on short-term results, although the long-term expectation for a good player can be much higher. This kind of game is typical of low-limit poker, including most home games, even among competent players.
If there are a few loose-aggressive players at a generally loose table, they will raise and re-raise each other, not necessarily out of sound strategy, but to make the pot bigger and make the game more exciting.
These players often lose a lot of money, but their behavior will amplify the effect of the aforementioned randomization and increase the magnitude of the swings.
Loose play is contagious, in that the presence of a loose player tends to loosen up the other players.
Another less-documented phenomenon is that passive play can be contagious. Passive players tend to be unresponsive to stimuli, and if they want to call, they will call whatever bet comes to them.
This makes raises by aggressive players less effective at thinning the field, which discourages those players from raising. Players who aggressively raise at a passive table usually increase the size of their swings much more than the size of their profits, a dilemma frequently decried by players who, oblivious to the irony, blame their losses on the failure of their opponents to play properly.
There are two relevant points here that apply to your home game:
1. First, you want your home game to be an environment that rewards skillful play, because you want to use those games to develop as a player. A tight-aggressive home game can be hard to win money from, but it can be a gold mine of poker experience.
You will be learning how to navigate through a hand after you flop a middle pair while other guys are spending their time trying to master the rules of Midnight Baseball.
2. Second, once you have made your best effort to have a quality game, you have to make the most of whatever type of game you end up with. Indexing your play to the game at hand is a skill that you must develop.
It is often said that you should play just a little tighter than your average opponent. The theory is that because you are tighter, you are generally playing better than your opponents in that respect, yet you are participating in the game frequently enough to take advantage of their looseness.
But be careful: Many players misapply this idea by playing just a little tighter than their loosest opponent, and end up just joining that player as a money source for the others. The best course of action is to play your best game and let a loose player's mistakes build your stack naturally.