Rally in Home Builders Slowing: Barclays Analyst

The rally in home builders looks to slow down, suggesting it’s time to switch to a few stocks that haven’t run up as much as their peers, Barclays analyst Stephen Kim said Tuesday on CNBC.

“The case we were making, actually, in our report is that the U.S. housing market was actually going to continue to roll along. In fact, because we think we see supply constraints actually starting to develop, we actually think home price appreciation is going to exceed what most people think,” he said on “Fast Money.”

Kim said that the bullish outlook for the U.S. housing industry could mean another 15 percent in top-quality names like Toll Brothers and Lennar.

(Read More: Is Housing Risen From Ashes? 'Industry Has Come Back')

“The best names get picked off real early, and valuations get pushed up to levels where they’re probably, frankly, pretty full right now,” he said.

That makes it time to move to names like KB Home or PulteGroup , “which still leave more room to the upside,” he added.

Trader disclosure: On Sept. 25, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Josh Brown is long AAPL; Josh Brown is long WFC; Josh Brown is long GDX; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long TLT; Josh Brown is long XLF; Josh Brown is long WMT; Josh Brown is long TGT; Josh Brown is long SBUX; Josh Brown is long XOM; Mike Murphy is long WFC; Mike Murphy is long TGT; Mike Murphy is long LEN; Mike Murphy is short KBH; Mike Murphy is long TWI; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Jon Najarian is long call spreads in AKAM; Jon Najarian is long call spreads in FB; Jon Najarian is long call spreads in DHI; Jon Najarian is long call spreads in LEN; Jon Najarian is long call spreads in FIO; Jon Najarian is long CBOE; Jon Najarian is long CME; Jon Najarian is long GLUU; Jon Najarian is long STSI;

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