A 20 percent rise may seem like a decent investment, but other builders have significantly more upside, East said.
“I think Pulte is probably the single name that I like most,” he said. “I think it’s a tremendous turnaround story that they’ve really executed well and driven operating profit pretty nicely.”
Another name, D.R. Horton is trading on par with other home builder stocks. Each stock that East mentioned has more than doubled in price in the past year.
“It’s arguably one of the best-run companies out there, with some of the strongest operating margin, as well,” he said about D.R. Horton.
He added that Lennar has executed better than anyone on the land side, which has set it up for accelerating growth in profits over the next year or two.
Investors who are still hesitant about betting on strength in home builders will get another look into the housing crystal ball soon. On Thursday at 10 a.m. EST, new home sales data are set to be released.
—By CNBC.com’s Katie Little; Follow Her on Twitter @katielittle
Additional News: Existing Home Sales Up
Additional Views: Bearish on Building Products
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No disclosure information was available for Stephen East.