RealMoney Radio: Home Cyclical

The sellers in the homebuilding industry have been "desperate" to sell their houses and are thus cutting their prices, Jim Cramer said on his "RealMoney" radio show Thursday.

Buyers who have been waiting for these price cuts should now be ready to buy, he added.

Homebuilders cannot finance their inventories so they continue to cut prices until they find buyers, which is what is happening now, Cramer said.

After all, the housing business is not an industry that can be kept on the books because houses are really expensive.

In fact, "there is not an industry in the world that can finance nonproducing inventory except oil, which is why I like that business so much," Cramer said. "Its inventory goes up in price as it sits because of a developing multiyear storage."

He believes that the analysts got "lulled" into thinking that homebuilding was a secular grower, and then they discovered it was cyclical, Cramer went on to say. "They downgraded the cyclicals at the bottom of the cycle because the price-to-earnings ratios soared."

Analysts love to wonder out loud where the economy may be going, Cramer said. But if market players open their eyes, he believes they will be able to see for themselves where it is headed.

The pullback of the auto and homebuilding sectors -- "two very important industries that matter to the economy" -- augurs a "big decline" in the economy, Cramer said.