No, I am not referring to the names in the Mitchell Report.
One of the advantages of the falling dollar has been the benefit to a handful housing markets, by attracting foreign buyers, enticed by the imbalance of currency. The British Pound is current about 2:1 and Euro is about 1.5:1 making for a significant discount to foreign buyers of US assets.
British buyers see US residential real estate at half price.
Specific to housing, real estate markets like Seattle, New York and Miami benefited from the increased demand, but housing markets in midwestern cities were likely benefited to a lesser degree, probably correlated to tourism trends. The weak dollar been one of the leading reasons that a market like New York City maintained relatively robust real estate market in contrast to many other markets. However, it is not enough of an economic force that it assures such a housing market from a downturn.
A currency depreciation as big as the one the dollar has already experienced–to say nothing of the prospect of a further drop–would be a big inflationary problem for a small, open economy like Britain (which still has a currency of its own). The effect is muted for the US, because its economy is bigger, less open (not because of import restrictions, but by virtue of its size), and because exporters selling to America are more inclined to price to market.
The sharp increase in exports has helped temper some of the economic damage from housing.
Every time the dollar weakens, US exporters and US import-competing industries are gaining competitive advantage and/or increasing their profitability. The explosive growth of US export volumes (reaching 10 percent per year) is part of the reason that, despite the collapse of US housing construction, the US economy is still expanding at a reasonable albeit declining rate.
The bottom line is that a weak dollar places the economy at greater risk for inflation, which has become a renewed concern over the past week as the FOMC opted for another 25 basis point cut in the federal funds rate.
Inflationary pressures bring on higher mortgage rates. And unlike Major League Baseball players, its not something to stick into the housing market.