I expect the housing stocks to continue to perform poorly for the rest of the year, given the damaged psyche of the consumer thanks to Washingtonian bungling.
But I think consumer spending on his or her home is not going to let up, even as the stocks will go down based on a rate rise if it continues. I think the opportunity in the sector comes if rates go back up to 2.80% and the housing-related stocks get hit again. Then you have to pounce because the earnings will be unimpeded, even as the stocks say they should be. They won't be and that's why they are buys.
My favorite? It's Lowe's because the chain has gotten it together and closed the gap with Home Depot for the first time in decades. But Home Depot will be no slouch either, and I expect it to pause and go higher still.
But the homebuilders? I still see no reason to own them. Their multiples aren't so low, their sales prospects aren't so high that they can be considered either value or growth stocks. Only time or price can solve those issues, and that's something nobody wants to wait around for anymore, especially if there's no dividend protection or, for that matter, protection from Washington if you own these underperforming stocks going into 2014.Editor's Note: This article was originally published at 7:15 a.m. EDT on Real Money on Nov. 4. Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long Lowe's.