A lower number of underwater mortgages "is very significant," Cramer said, citing the CFO of Home Depot, who said that when a homeowner goes from underwater to above water on their mortgage, they spend three times as much at the retailer than they would otherwise.
Cramer also said that news of rising interest rates are causing people to pull the trigger on refinancing and home purchases.
(Read More: Buyers Ignore Surging Rates, Send Mortgage Apps Higher)
"I think people come off the sideline," he said. "You gotta plunk the money down now because the housing affordability, which is still fabulous, that does go away if rates go up."
"I think we can't overemphasize housing punch above its weight if it continues to make it so that home prices are going higher."
(Related: Gradual Rise in Rates Won't Stop Housing Recovery: Lennar)
"It's a feel good story" that far outweighs the effect of events in Turkey on U.S. markets, Cramer said. "You've got to put it in context."
The other factor—net interest margin—is something Cramer said bothers him about the market's current perspective on the bank sector.
"For the longest time, we wanted to see net interest margins go up," he said. Now, with rates on certificates of deposit (CDs) as low as they are—the highest national rates on one-year CDs are around 1 percent, according to Bankrate.com—banks can invest these deposits in government bonds with higher yields and generate "a huge net interest margin, gigantic," Cramer said.
(Read more: Rising Rates Scare Borrowers Into Action)
"Net interest margin is going to explode this quarter. When you can give the depositors next to nothing and invest that same money. ... It is incredibly bullish" for bank stocks, he said.
Disclaimer: Jim Cramer's charitable trust owns shares of Wells Fargo.
—By CNBC's Paul Toscano.
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