This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Jim Cramer: The Dichotomy in Housing

NEW YORK (Real Money) -- The dichotomy between the housing stocks and the stocks of companies that make goods that go into new homes is about as stark as I can remember. And the disparity is growing.

You take high-quality home-related stocks such as Masco (MAS), up 25%; Home Depot (HD), up 24%; and Lowe's (LOW), up 38% for the year, and you compare them with homebuilders such as Pulte (PHM), down 3%; Toll Brothers (TOL), flat; Lennar (LEN), down 9%; and DR Horton (DHI), off 6%, and you might as well be talking about two, totally unrelated industries.

That's because they are two different industries. One's related to confidence, credit, cost of building homes and interest rates, and the other is just about pent-up demand to spend on a house you already own, knowing that your house is done going down in value.

I think that the confusion over these two parts of the housing story is what has kept a lot of people out of Whirlpool (WHR), up 44%, or Masco or Fortune Brands (FBHS), up 45%. Investors just don't believe that they aren't a tandem, that they aren't handcuffed.

It's still one more example of a changed market that people don't understand has occurred. The housing stocks haven't done much at all year. They didn't do much ahead of the interest-rate spike and they haven't done much since. I think that's because they are still expensive relative to earnings. They ran up so much going into the year that they will have to stay put and the fall will have to be a good selling season if they are even going to maintain their current price levels. I don't think it will turn out to be so because of the sequester, debt-ceiling and budget shutdown debacles.

But the housing-related stocks were standouts coming in to the year and then got hammered only with the sudden rate increase. Ever since, then they have slowly but surely come back as the 10-year drifted below the 2.5% level. I think these stocks are now, to a degree, vulnerable again if rates tick up to 2.75% -- as they appeared to be during the end of last week's session -- but that they are benefitting from a consumer that has a predilection for hard goods over soft goods. I don't see that changing anytime soon.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
DOW 17,116.62 +9.92 0.06%
S&P 500 1,997.75 -2.27 -0.11%
NASDAQ 4,564.72 -5.9170 -0.13%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs