Not only has the savings and loan mess created a financial disaster of catastrophic proportions for U.S. taxpayers; efforts to repair the damage are having other consequences - namely, squeezing the housing construction industry.

A report issued a few days ago by the U.S. Commerce Department showed that homebuilders began work on fewer houses in April than at any time since the depths of the 1982 recession.Housing starts - a good measure of the real estate market and a barometer of the economy - fell 5.8 percent from March to April, the third monthly decline in a row, and were 7 percent below their level for the same month a year ago. All of this works out to a seasonally adjusted 1.2 million housing starts for a year. Home builders had been planning on a yearly rate of 1.42 million units.

The National Association of Homebuilders says the S&L reform law that limits the amount an S&L can lend to one borrower is pushing builders into a credit crunch.

Unfortunately, banks also are tightening their real estate lending, making it harder for builders to secure money from other sources. More than half the builders surveyed said they are cutting back construction plans because of the problem in getting money.

Congress is looking to give some relief. There are some 70 sponsors of a House bill that would ease the S&L rules by giving home builders a transition period to find other funding.

However, before Congress acts, it should remember that the S&L reform is not the only culprit in the housing decline. Other factors may have even more to do with it.

For example, since the first of the year, fixed interest rates on a 30-year mortgage have risen from 9.5 percent to 10.5 percent. Depending on the price of the house, that could add $100 a month to the payment, enough to discourage many buyers.

In addition, analysts say home prices are unrealistically high and there has been over-building in the higher brackets, where there is the least demand. With too many houses in the wrong price range, the failure to sell tends to reduce the demand for new home starts.

Also, home construction starts were unusually high in January, a factor that may have contributed to the slacking off in April.

Before adjusting the S&L reform laws, why not let the housing market shake out a little more? After all, this is the way supply and demand are supposed to work in a free-market economy.