NEW YORK (TheStreet) -- The latest S&P/Case-Shiller housing index of 20 metropolitan areas increased 0.9% in March, compared to 0.8% in February. TheStreet's Jim Cramer says this looks like "the peak" because prices went up while mortgage rates did not fall, which made housing affordability "not so hot."
Cramer says a decline in mortgage rates could reignite the housing market. The rates are at approximately 3.25% right now and were at 4.25% last year. He says that affordability really killed housing more than the actual price appreciation.
Cramer suggests investors keep an eye on mortgage rates. If the 10-year note falls to 2.25%, then we will see an eruption of sales. He says Toll Brothers (TOL) will be the tell when the company reports on Wednesday. If they say mortgage rates are coming down again, then we will see much more home building, many more jobs and "another leg to the great housing story."
Separately, TheStreet Ratings team rates TOLL BROTHERS INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate TOLL BROTHERS INC (TOL) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, growth in earnings per share, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."