"A damaged economy cannot afford to allocate such a large share of limited resources to housebuilding."

My first impression would be that the economy is compared to something that can quite literally be damaged, but still work partially, like an engine. So it is an engine that produces money (or GDP), but now it is sputtering and not as much money is coming out. So this limited flow is not enough to pay for houses.

Reminds me of the Grotte mill, that according to ancient Scandinavian mythology could mill forth anything (in particular gold) but was so heavy that only giants could work it. (It all ends badly.)

The engine analogy has similar properties to the household analogy, but I think it can easier be remodelled into something useful. Since the economy is damaged it needs repairing. For example, to repair the economy we need to get people working, and what better way then to build homes that is sorely needed?

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