While the market has fallen 9% from its April highs, Mad Money host Jim Cramer believes the worst is over.

The financial reform bill appears set to pass. While the bill itself may not be entirely satisfactory to Wall Street, at least the market will not longer be weighed down by uncertainty.

The debt crisis in Europe appears to be contained. Just a month ago, Banco Santander (STD: 8.75 +1.86%) was trading at a 52-week low, but has since jumped 50%.

It seems that the only remaining obstacles left to address are the Gulf oil spill and unemployment. Fortunately, it seems as though BP (BP: 46.97 +0.79%) is nearing a solution to stop the oil spill. Of course it will take some time before the labor markets return to full strength.

Overall Cramer is very optimistic and he feels that we have already experienced the market lows for this year.

This week, the most visible economic report showed new home sales plunging 33% to only 300,000. This number was much worse than the anticipated 400,000 home sales. However, Jim Cramer said on yesterday’s Mad Money show that investors should have been expecting this big drop.

Housing related stocks have been punished over the past few months. The markets seemed to be pricing in an expected fall off in home sales when the federal tax cut expired. However, this week’s housing report send the stocks even lower. Too low in Cramer’s opinion! Cramer would be buying right now since housing is so out of favor. Of course, Cramer is bullish on housing long-term and even has predicted a housing shortage by 2012.

Cramer recommends that investors revisit these housing stocks and even speculated that housing stocks could double from their current levels.

Lowe’s (LOW: 26.88 -0.30%) – Cramer has hated this stock in the past, but he thinks its drop from $28 to $21 makes it attractive.

Fortune Brands (FO: 0.00 N/A) – Similar to LOW, the decline from $54 to $42 in FO’s stock price makes it too cheap to pass up.

Toll Brothers (TOL: 23.36 +0.69%) – The last time TOL’s stock price was at $17, management was saying that business was “hideous”. Now management is simply stating that business is “light”.

Cramer believes that investors will soon recognize how attractive these housing stocks are. Once that happens, it will push their stock prices much higher. Many of these same investors were down on auto stocks following the expiration of the cash for clunkers program. However, Cramer recommended that investors buy Ford (F: 12.84 -0.31%) at that time and since then the stock has doubled. Could housing stocks be the next to double?