Can housing renaissance endure? Cramer’s latest ‘tell’

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

With mortgage rates hitting a two year high, pros are wondering if the strength in housing can continue.

Sales of new U.S. single-family homes vaulted to a five-year high in June, despite the average interest rate on a 30-year loan jumping to 4.46 percent, the highest since July 2011.

Although those rates are low historically, the Street remains uncertain that the sector can withstand further increases.

With housing at a potential crossroads, pros like Cramer often check in with companies in the heart of the industry to determine what's next.

"I'm still a believer in a housing, but I also know that we need to collect some evidence, and the way I do my research is by listening to what individual companies with boots on the ground have to say about the subject," Cramer said.

And few companies are as pegged to the health of the housing market as Owens Corning, the maker of insulation, composites and roofing materials.

Jonathan Maddock | E+ | Getty Images

"The company gets 54% of its sales from North American residential repair and new construction," Cramer explained.

Looking at recent earnings, results missed estimates. Specifically, Owens Corning earned $49 million, or 41 cents per share, for the three months ended June 30. Analysts, on average, expected earnings of 69 cents per share and $1.44 billion in revenue. A year ago it made $39 million, or 32 cents per share.

Although that may sound discouraging net income increased 26 percent in the second quarter, Also, Cramer says underneath the surface, there are other metrics that look promising.

"Looking beneath the headline numbers, you get the sense that insulation sales are expected to improve in the second half," Cramer said. The company also foresees strong volumes for roofing, going forward.

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Therefore, Cramer suggests watching this company closely. What Owens Corning has to say about insulation and roofing could be a valuable 'tell' for investors looking to take the temperature of the sector, overall.

"To build or not to build, that is the question. The entire market is wondering what will happen to housing after last quarter's staggering rise in interest rates," Cramer said. Owens Corning may well provide the answers.

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