"We had been building homes at a rate of about 1.5 million a year during the heyday. Okay maybe that's not sustainable. But we dropped to 400,000 a couple of years ago, back to levels of the 1950s, when we had half as many people in this country. Talk about unsustainable. That's ridiculous," he said.
In addition, Cramer thinks other problems vexing the sector have been resolved.
"A combination of banks working with underwater borrowers, a pro-homeowner Washington, and settlements with Fannie Mae and Freddie Mac over bad loans have all helped to restore health to the sector."
If you're agree with Cramer and want to put money to work behind this theme – you may be overwhelmed by the wide range of investment opportunities. Because owning a home is central to the American dream – strength in the sector ripples across a fairly large number of companies.
"First, and most obvious, are the homebuilders. We saw fabulous runs in the whole group, but especially in Pulte, Standard Pacific, Lennar, Toll, as well as Horton and Hovnanian," said Cramer. "I know all of these stocks have had magnificent runs, but I don't think they are over."
Because these stocks have already made sharp gains, Cramer suggested waiting for a pull back before making a move.
But when the pullback comes, he said, "I think you go for Toll. Toll used this downturn to get terrific land, to rein in costs and to extend its reach beyond where it traded during the heyday. It's the best of breed and you know how I feel about the best of breed."