Could the dramatic pause in the housing market soon become a steep slide? Home sales, prices and new construction have been rising more slowly each month, triggering memories of the 2008 collapse. That crisis was a comeuppance from the excesses that preceded it: too much money, debt, housing, imports and consumption. Americans lived beyond our collective means, and the bills inevitably came due.

But what if that understanding of what happened is wrong? What if, even at the peak of building in 2005, the problem was too little...