The New York Times reported the problem is not with the wiring but with the end connections. Oxidation is a significant problem with aluminum. Oxidation is to aluminum what rust is to iron. A white powdery substance, called aluminum oxide, forms on the surface of the aluminum. Oxidation forms because of moisture. When the wires oxidize at the wall switch or outlets, it stops conducting electricity. Therefore, the area of the connection becomes a resistor. The side-effect of resistance is heat. Licensed home inspector Daniel Friedman, quoted by The New York Times, stated that enough heat can be created by the oxidation problem to start a fire. The CPSC stated in 1974 that they received reports of many home fires traced to overheated aluminum terminal wiring.
All metals expand when heated and contract when cooled. Aluminum expands and contracts at a far greater rate than copper. Wires usually run in attics, and in exterior walls. In the summer, an attic may exceed 100 degrees Fahrenheit. In the winter, an attic may drop to 30 degrees or less. This constant seasonal expansion and contraction affects the terminal screws at the wall switches and outlets. The end result is the terminal screws loosen up, leading to a poor connection. A poor connection leads to heat. The heat may be hot enough to start a fire.
A seasoned electrician knows never to nick a wire when stripping it to make terminal connections. A nick creates a stress point, leading to eventual wire breakage. Qualified electricians use specialist tools to strip the wire, so only the insulation is cut. An unqualified person does not understand this and perhaps just uses a pocket knife to strip the insulation. Aluminum is a very soft and weak metal. Over time it will break at the nick point due to stresses. The breakage leads to a short and sparking, since the wire is now "flopping around" inside the junction box. Sparking leads to a fire. If your house has aluminum wire, you cannot trust that the installer did a proper job with no nicks. The CPSC specifically states that only a qualified electrician should have installed aluminum wire, since a nick-free installation is critical.
The possibility of fire is great with aluminum wiring. To avert this, Home Inspector Friedman and the CSPC have several recommendations. First, Mr. Friedman states the best cure is to replace the aluminum wiring with copper. The second best cure is to use special connectors at the junction boxes. These connectors transition from aluminum to short lengths of copper wire for the terminals. The CPSC recommends a thorough inspection by qualified personnel and to replace switches and outlets. The new switches and outlets should specifically state they are designed for copper and aluminum wiring.