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Cramer: Housing Could Quell Cyprus Bailout Fears

Stocks cut their losses in the final hour of trading to close narrowly mixed Tuesday, after lawmakers in Cyprus overwhelmingly voted against the controversial bank bailout deal, prompting Jim Cramer to remain skeptical of the market.

"I'm trying not to be too positive or too negative, but I am definitely playing the skeptic," Cramer said on CNBC's "Mad Money." "I worry about what I know and what I don't know, but most important I want to emphasize what could drive the market either way."

(Read More: No Way! Cyprus Parliament Rejects Bank-Deposit Tax)

Cyprus's parliament rejected a tax on bank deposits as conditions of an international bailout. Thirty six members voted against the proposal, 19 abstained and no one voted in favor of it.

Meanwhile, the finance minister of Cyprus Michael Sarris offered to resign, but the president rejected the resignation, sources told CNBC. In addition, unconfirmed rumors swirled that Cyprus will leave the euro zone if the bill does not pass.

(Read More: Tiny Cyprus = Big Market Impact)

A construction worker uses a hammer at a new housing development in San Mateo, California.
Getty Images
A construction worker uses a hammer at a new housing development in San Mateo, California.

To Cramer, the Cyprus bailout can play a role in the market, but he thinks the U.S. housing market will be of greater influence. Housing starts gained 0.8 percent in February to a 917,000-unit annual rate, while new permits for construction jumped to the highest level since 2008, according to the Commerce Department. Economists had expected a reading of 915,000.

"I think we're going to build more than a million homes this year, and these permit numbers indicate that I could be very right and when housing is humming it is a gigantic portion of the United States' economy," Cramer said, noting many building products are made by U.S.-based companies. Housing also gives way to a spike in employment, he continued, as people are needed to build, sell and finance homes.

"To me we will look back on this moment and recognize that while the horrendous rules imposed on the Cypriots certainly damaged Europe and the euro once again, what mattered here in America is that the housing boom was picking up steam at the same time," he said.

Read on for Housing Recovery 'Fundamentally Strong': Lennar CEO

— CNBC.com contributed to this report

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