Higher Interest Rates to Slow Housing Gains?

Our long-term projection on real estate, housing stocks and housing remains bullish. Accordingly we have recommended several positions which we believe will allow participation in the expected uptrends.

We do not believe that higher interest rates will significantly slow the growth of the housing market or for that matter the growth of housing related stocks such as Williams-Sonoma. On the contrary, we feel that a move by the Federal Reserve to raise interest rates will bring in a flood of new buyers seeking to lock in rates before they go even higher.

In any event we do not believe that the Federal Reserve will take any aggressive actions which might disrupt the already tepid recovery. The chart of the Homebuilders ETF XHB below show the technical strength that we are taking advantage of in our current housing trades.

xhb strength 8-16-15