In this environment, Wetenhall likes building products distributor BMC Stock Holdings, which he thinks can run to $22 or $25 a share, and thinks door manufacturer Masonite is "smoking hot," with "excellent valuation" and great growth prospects. He predicts it can go as high as $80 a share.
He is also bullish on Whirlpool, which he believes can potentially benefit from a shifting commercial setting once President-elect Donald Trump takes office.
"We're dealing with a changing landscape with a lot of byproducts between what's happening in the housing market — which we like the fundamentals — as well as new policy and legislation that can change the commercial environment," said Wetenhall.
He thinks Whirlpool can hit $200 a share.
Meanwhile, homebuilders also still have a positive outlook on their market. Homebuilder sentiment held steady in November at 63 in the National Association of Homebuilders/Wells Fargo Housing Market Index. Anything about 50 is considered "positive."
Wetenhall is neutral on the homebuilders, but likes select names. He believes the sector needs to focus on the return of the first-time buyer, which accelerated this year and he thinks will continue into 2017.
D.R. Horton is the best player in the game, and understands how to cater to those buyers better than anybody, Wetenhall said.
— CNBC's Diana Olick contributed to this report.
Disclosures: RBC Capital Markets has provided BMC Stock Holdings and Masonite with investment banking services. RBC Capital Markets has provided Whirlpool with non-investment-banking-related services in the past 12 months.