Introduction The performance of the housing industry has fallen after the recession. It is a fact that the recent economic recession was started by the mortgage industry. The federal government had deregulated the mortgage industry. This allowed banks to give loans to subprime borrowers. This caused a boom because many subprime borrowers obtained loans from the banks to purchase the mortgages. The housing boom reached its climax in 2007. With the increasing inflation in the country, many subprime borrowers were unable to service their loans. This was worsened by an increase in food prices, oil prices and failure in most industries. This caused mass default of the subprime loans because the borrowers were unable to repay their debts. The mass default caused failure in the banking industry, and this caused most banks to collapse. The failure in banking industry caused spill over effects to other industries. Therefore, the recession spread over to other industries and with no time other countries started to suffer from the recession. International trade caused the recession to spread to other countries trading with the US. In 2010 some countries started to recover from the recession while others were seriously affected. Some countries have completely recovered economic stability today but others continue to be affected by the failure in most industries in their economies. In the United States, most industries have recovered, but the housing industry is yet to recover from the recession (Warren, 2011). Impacts of the recession to the real estate industry The federal government has amended the laws concerning the housing industry to protect the economy against a similar turmoil. The banking industry has been restricted against issuing loans to subprime borrowers. This law was enacted to prevent the banking industry from issuing loans to the subprime borrowers because they have a high likelihood of defaulting loans. This has been done by increasing interest rates to subprime borrowing, hence restricting subprime borrowers from accessing mortgage loans. The government announced bailout program to all subprime borrowers who failed to repay mortgage debts (Organization for Economic Co-operation and Development, 2010). House prices continue to fall even though the country has recovered from the recession. House prices have dropped by almost 50 percent since the recession started, and this shows that the industry is suffering huge losses. This is the worst experience that the industry has undergone. The graph below shows a drop in the house prices in South and West regions of the United States. It indicates that house prices had been increasing up to 2006 when the prices started to drop. The decline in prices was so serious such that it was predicted to be negative in 2007 and 2008 (Warren, 2011). It is evident that house prices continued to drop after the recession. From 2007 to 2011 house prices have been at the lowest level ever experienced in the history of the US. The housing industry has been affected such that constructing of new houses has become a major challenge. Home builders report a drop in business, and constructing new homes has dropped after the recession. Some of the home building companies are Pulte, Lennar, D. R. Horton and others. These companies reported the highest profits and prices in 2005 and 2006. D. R. Horton had the highest stock prices of $42.82 in 2005. Pulte had revenues of $14.69 billion in 2005 (Gittelsohn & Willis, 2010). These companies have reported reducing performance since the recession started, and