Last month new home sales surged by 12.4% and year over year by 31.3%. This is the highest since the housing boom in 2007. Put a house on the market in most places at the right price today and you will have offers over the weekend.
This boom has also affected certain stocks such as Best Buy (BBY). Why? Instead of people spending money on themselves, they are buying things such as new televisions sets and appliances, supported by the new value of their homes. Since the beginning of the year, shares of Best Buy have risen from a mid-January price of $25.87 to up $39.95 at the time of writing today. What does the future hold for this stock and others? Until such time that it becomes obvious that the Federal Reserve is going to raise rates from the artificially low current position, stocks are the only game in town. A word of caution, once the market gets wind of the real possibility of a rate change, which could be any day, the continued rise in stock prices could reverse.