The Federal Reserve need not try to cool the hot US housing market with higher interest rates even if house prices continue to rise, CNBC’s Jim Cramer said Wednesday.

“I don’t want to repeat the mistakes that led to the financial crisis,” said the Mad Money presenter. “Unlike before the great recession, home buyers are now actually solvent with excellent credit and strong equity portfolios.”

In the run-up to the financial crisis, regulators failed to enforce lending standards because buyers were over-indebted on their purchases, Cramer said. The Fed then stepped in to cool the market by raising the key rate more than a dozen times.

However, Cramer pointed out that lending standards are now stricter and low mortgage rates coupled with pandemic lockdowns have added a rush to home buying. Millennials have emerged as the largest group of buyers in the market after years of delaying home ownership for a variety of reasons, including the impact of the 2008 financial crisis, he added.

Cramer also noted that the real estate market – known for its cyclical nature – has turned into a secular growth story amid low lending rates, sparse inventory, and pent-up demand from millennial buyers.

“The Fed can try to slow the economy down by raising interest rates, but millennials have been living in their parents’ basement for years,” he said. “After a decade out of the financial crisis, they finally have the capital to buy their own homes.”

The average home sales price in the US rose above $ 350,000 for the first time in May, nearly 25% more than a year ago, according to the National Association of Realtors.

Economists have linked the rising cost of home buying to the low supply of existing homes in the market. Meanwhile, home builders like Toll Brothers believe it will be years before supply meets demand.