CHICAGO—When Ben Bernanke spoke at last week's NIC National Conference on seniors housing, he illustrated one of the reasons the housing market has not yet fulfilled its post-recession potential. He told the story of a well-to-do homeowner who could not get a loan to refinance his home. The name of the homeowner? Ben Bernanke. “I recently tried to refinance my mortgage and I was unsuccessful in doing so,” the former chairman of the Federal Reserve told an assembled lunchtime throng of more than 2,000 at the Sheraton Chicago Hotel & Towers.

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

The personal revelation came in the midst of a public discussion between Bernanke and Mark Zandi, chief economist of Moody's Analytics, on the state of the economy and how it would affect the world of real estate. Zandi began by asking the former chairman whether the economy was now on a sounder footing than it was before the near-meltdown of 2008.