Pending Home Sales Data Signal a Bottom

Oh my, right in the same breath about the pending home sales data that has bottom written all over it, the pundits come right back and say, "Won't these higher rates derail things?"

OK, let's go over it. You have two components: affordability and rates. Affordability is off the charts. Rates? They were ridiculously low, now they are just historically low.

How can the pundits keep pushing on this string of mortgage trouble? It is driving me crazy. Especially because the $8,000 for first-time homebuyers is larger than any quarter-point rate boost for the buyers. Do the math. A 4.75% mortgage vs. 5% on $ 275,000 (average house), of which you put down 30% -- the mortgage payments are vastly exceeded by the credit for some time, certainly the time you need to settle in. You can do the math to 6%, and it still works. Darn it, why don't people talk about that?

I am thinking of calling the housing decline over right now on this data. There are very few regions that haven't bottomed. How much more forward information do you need?

The other day, someone in some blog was mocking my June 30 call. I am so confused about this. How many states does it have to bottom in? I have never said it will do a U-turn; I just needed an end to house price depreciation to make the numbers work for the economy. The resistance to saying anything positive about housing in the face of the data is ridiculous, and two years ago I went on national TV and gave you a guarantee that you would lose money if you bought a house. That's simply not the case, and this pending home survey tells you that.

This is not a clarion call to buy Toll Brothers (TOL - commentary - Trade Now) or Lennar (LEN - commentary - Trade Now) or KB Home (KBH - commentary - Trade Now). It is a clarion call to buy JPMorgan Chase (JPM - commentary - Trade Now) and Bank of America (BAC - commentary - Trade Now) and Wells Fargo (WFC - commentary - Trade Now). The latter may have to do a deal; the former two have done them. (I would buy JPMorgan Chase on the broken print, which I don't think will last.)

They are all set to ramp. The data are convincing. The only way I would be wrong is if the data are irrelevant, and I just don't know how that is.

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

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Know what you own: Another money center bank stock is Citigroup (C - commentary - Trade Now).

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