CHICAGO—When Ben Bernanke spoke at last week'sNIC National Conference on seniors housing, heillustrated one of the reasons the housing market has not yetfulfilled its post-recession potential. He told the story of awell-to-do homeowner who could not get a loan to refinance hishome. The name of the homeowner? Ben Bernanke. “I recently tried torefinance my mortgage and I was unsuccessful in doing so,” theformer chairman of the Federal Reserve told anassembled lunchtime throng of more than 2,000 at theSheraton Chicago Hotel & Towers.

Although he recognized that the housing market was spooked by acollapse which followed years of easy credit, the fact that someoneconsidered a great credit risk by any rational standard was denieda refinance means “we've gone a little too far.” He recommendedthat lenders lighten up a bit. If they don't it could impact theeconomic well-being of an entire generation. “The first-timehomebuyer market is not what it should be,” he pointed out, andmillennials especially have struggled to establish households.

The personal revelation came in the midst of a public discussionbetween Bernanke and Mark Zandi, chief economistof Moody's Analytics, on the state of the economyand how it would affect the world of real estate. Zandi began byasking the former chairman whether the economy was now on a sounderfooting than it was before the near-meltdown of 2008.