Paul Krugman writes:

The housing bust has lived up fully to my expectations. So far, however, the economy has held up surprisingly well (ask me again in a few months). How come?

It’s the exports, stupid.

I haven’t seen this chart published elsewhere, but it seems to me that it tells the story. The blue line shows residential investment as a share of GDP (left scale). It has plunged impressively. The red line shows exports as a share of GDP (right scale). Thanks to the weak dollar, they’ve risen almost enough to offset the housing plunge.

Meanwhile, consumer spending has held up, and there has been a modest plus from state and local government spending.

No particular policy moral here, just an observation.