NEW YORK (Real Money) -- Maybe it's a multi-year move that is not tied to the Fed, but tied to the need for more homes?

That, in essence, is what Home Depot (HD) CEO Frank Blake said last night about why he doesn't think that we are at the peak or even near it when it comes to both his company and the housing-related entities in general.

Home Depot's put more thought into what drives sales than just about any company I have ever seen. Frank and Carol Tome, the amazingly good CFO, have done regression analyses that correlate every aspect of their revenue to gross domestic product, to percentage of growth domestic product spent on homes and to the level of indebtedness vs. the value of a house. The most important lead indicator? The value of a home. If it goes up, then you go to Home Depot to invest in that home.

In this analysis, a home is either a failing or a succeeding business, and if it is succeeding, you want to add to it, just as any rational businessperson would do.

When I talked with him I was all prepared to go over the usual grounds about what happens when the Fed tapers, blah blah blah. But Frank said the determinant isn't interest rates, it's the innate demographic pent-up demand from household creation. We are simply not producing anywhere near the level of homes we need to be able to replace what we are losing and sate the demand for those who are living with their parents.

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