Where's the Hubbub When Rates Go Down?

If housing is supposed to be choked off when the 30-year rates are at 5.55% like last week, does that mean now that we are back to 5.38% housing will accelerate?

And if housing is so decimated when rates are in the 5s because, alas, they aren't in the 4s anymore, how about last year this week when rates were at 6.42%?

We heard endlessly last week that the housing recovery was going by the wayside because of the monster move in rates. But no one said a thing about the fact they weren't up that much or questioned what would happen if they went back down. We heard over and over again that the Federal Reserve was out of bullets to bring rates down again, so we would be staggered and there would be no bottom.

This kind of "bad news, rates are up/no news, rates are down" analysis has played havoc with investors forever and has been a classic misdirection play for the moment. Here's the real deal: house-price affordability plus low rates plus a tax credit have led to a level of sales that has actually stimulated homebuilders to build homes.

Honest reporting would have led to stories about how rates declined without the Fed buying and suggesting we are in an era with low rates but not super-low rates because there is good mortgage demand.

No, it's not this incredibly fabulous "stop trading" story. It's just a good one, worthy of reporting, because of how negative the story was just five days before.

At the time of publication, Cramer had no positions in the stocks mentioned.

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Know What You Own: Some homebuilder stocks that might interest investors DR Horton (DHI - commentary - Trade Now), NVR (NVR - commentary - Trade Now), Toll Brothers (TOL - commentary - Trade Now), Pulte Homes (PHM - commentary - Trade Now), Garfisa (GFA - commentary - Trade Now), MDC (MDC - commentary - Trade Now) and KB Homes (KBH - commentary - Trade Now). For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.

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