While the latest housing data is a sign the industry is on the mend, the recovery has been taking a lot longer than people thought—and that means there are hidden values to be found, portfolio manager Michael Sansoterra said Tuesday.
U.S. housing starts increased 0.2 percent to a seasonally adjusted annual pace of 1.21 million units, the highest level since October 2007.
However, Sansoterra noted that is still about 200,000 units lower than the last 50-year average. So anyone who thinks the housing trade is getting overvalued is wrong, he said.
"As long as demand is still there and still growing, albeit slowly, the stocks valuations aren't quite right because the expectations and the earnings aren't quite right," the chief investment officer and lead portfolio manager with Silvant Capital Management in an interview with CNBC's "Power Lunch."