Tex. Conditions Easing Banks' Crunch Hit?

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Texas bankers like to say that their states economic strength will shield them while the mortgage crisis causes several other housing markets to crumble.

Economists and others say there is some truth to it, though they are careful to note that Texas is not immune from the impact of a souring credit environment.

Nevertheless, Texas diverse economy, the stability of home prices, and a state law that restricts home equity lending has created what may be the most stable base for banking companies trying to stay on solid footing this year, observers say.

Most of the lenders here didnt get carried away with exotic lending, Jim Gaines, an economist at Texas A&M University, said in an interview last month. We just never had the big run-up in prices that is catching all the other housing markets on the way back down.

The median home price in Texas is about 30% below the national average, according to Texas A&Ms Real Estate Center. In Austin, the states capital and most expensive city for buying a house, the average price is about $181,000, less than half the average in California. However, prices inched up in every …