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Cramer: Proxy for housing? This is it!

(Click for video linked to a searchable transcript of this Mad Money segment)

Dabbling in real estate? Cramer thinks that there's no better proxy than this stock.

Realogy Holdings.

"It's the world's largest real estate broker, with a chain of 700 company owned brokerage offices and more than 13,500 franchises," Cramer said.

Although you may not recognize the name, Realogy operates a number of different well-known brands including Century 21, Coldwell Banker, Better Homes and Gardens Real Estate, Corcoran, Sotheby's and more.

"Realogy is so big that last year it was involved in 26% of all US existing home sales that involved a broker," Cramer explained. "I see it as a pure play on buying and selling homes. If you want a proxy for housing transactions, Realogy is it. "

Looking at the price action, shares declined almost 20% in 3 months, as investors worried that the increase in mortgage rates would crimp the volume of existing home sales.

"As a result Realogy was crushed, peaking around $55 in mid-May," Cramer said.

However, the latest economic data suggests the stock may have been oversold.

Getty Images

Sales of existing homes didn't drop, they rose in July to their highest level in over three years, suggesting a sharp increase in borrowing costs is having only a limited impact on the housing market's recovery.

Specifically, the National Association of Realtors said that existing home sales jumped 6.5 percent to an annual rate of 5.39 million units.

That was well above analysts' expectations and marked the fastest pace of sales since November 2009, when a home buyer tax credit was expiring.

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If you believe the real estate market remains relatively strong, the decline may have pushed Realogy to attractive levels.

"At current levels, it's trading at just 15.5 times next year's earnings estimates with a 22.5% long-term growth rate. That seems darned cheap to me if it can be maintained," said Cramer.

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