I keep hearing that the housing market needs to improve for the economy to turn around. Pundits and government types are always spouting off about the importance of this. I also read frequently how government regulation is strangling business and any hope of recovery.

What I’m witnessing in our housing market is more of the latter. Its not the first time either. We had a similar mortgage melt down in the late 80’s in the savings and loan industry. Once again it was caused by easy money due to improper government oversight. The consequence of that was a 9 year crash of the construction cycle in our area and the nationwide destruction of a thriving savings and loan industry that fed and educated tens of thousands of American families.

The consequence this time has been the destruction of a thriving mortgage industry that fed and educated tens of thousands of American families.

You never see a savings and loan any more, you never see private mortgage business either.

The government is further upping the ante by onerous regulation on the banking business that has become the principle funding source for home loans. The regulatory environment has become so restrictive that no new bank has been chartered in the whole country last year. That’s the first time that has occurred in close to 50 years. This is some serious stuff. Can’t start new banks, existing banks are forced to consolidate, competition is down, home loans are down, the economy is down, and I’m not feeling so good myself.