Housing Turn Means the Banks Are Safe Again

Housing affordability is driving the sea change and the bottom in housing, as we can see from these pending home sales this morning. We are seeing exactly what we want to see, a bottom in the South, where numbers rose 8.5% and are 7.7% above last year's numbers. The West is up 3.9% and is 1.7% above March of 2008.

These are major changes in the data. Of course we know that the Northeast is weak, and the down 5.7% is no surprise because this is the last area to roll over. The Midwest is off a percent, and that's all GM (GM - commentary - Cramer's Take) and Chrysler and the end of the auto industry as we know it.

People continue to fight this housing bottom, which is caused by the one-time tax credit for first-time buyers plus lower mortgage rates and terrific/horrific declines in housing costs. These numbers are remarkable because they make it possible to see why Wells Fargo (WFC - commentary - Cramer's Take) is as right as Buffett thinks -- Wells is the nationwide lender besides JPMorgan (JPM - commentary - Cramer's Take) and Bank of America (BAC - commentary - Cramer's Take) in housing, and it's the most efficient and profitable lender there is.

As soon as people understand this impact, they will be more willing to recognize that forbearance is king for the banks because the cavalry -- the end of the big inventory overhang -- is upon us.

No, this is not a clarion call to buy Toll (TOL - commentary - Cramer's Take) or Lennar (LEN - commentary - Cramer's Take) or Pulte (PHM - commentary - Cramer's Take) or KB Home -- they have all moved up huge.

It is a clarion call to buy the banks, particularly the Buffett banks that were, until this weekend, thought to be in the struggle to save their lives.

At the time of publication, Cramer was long Wells Fargo and JPMorgan.

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