Home prices were down significantly in December and Beazer Homes showed a 24% drop in profits for the quarter (reported this morning). Rising rates will not be kind to real estate prices - it will be the other shoe to drop. We have already experienced more than a 40% decline in local Santa Barbara prices, even with rates remaining at historical lows.
Many stocks are hitting all-time highs, or multi-year highs, with 19 of the 30 Dow stocks at (at least) multi-year highs, as of this morning. One could view this as a positive sign that the economy is improving and that stocks will push higher, or one could see this as a very risky investing environment. I lean towards caution.