Moreover, the official statistics likely understate the full extent of the inventory buildup, as many homebuilders have reported a sharp increase this year in the number of buyers canceling signed contracts. A home for which the sales contract is cancelled becomes available for sale once again but is not included in the official data on the inventory of unsold new homes.
Hence, I see the following as the key policy question: Is the United States, as a society, willing to forgo the leisure, home production, and/or near-term consumption required to generate materially higher future economic activity? I don’t see this question as one that I can answer using my tools as an economist.