Barely a few hours after Pulte Homes
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(Read More: Pending Home Sales Barely Budge in September)

Suddenly the stocks of the big builders reversed. It wasn’t so much the slight disappointment in the monthly index, it was more the comment from the Realtors’ chief economist Lawrence Yun:

“This means only minor movement is likely in near-term existing-home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013.”

Not exactly a rave.

We know we’re coming off the bottom of the housing crash, but over the summer it felt to some like we were rocketing off the bottom. Now, not so much.

It is a matter of perspective. New home construction is still barely half of what a normal, non-bubble market would look like. Existing home sales are coming off lows from last year, but last year was the hangover from the 2010 home buyer tax credit, so again, a little perspective.

“The year-over-year gain was the smallest of the year and comps against last year when the housing market was in a full blown double-dip mode,” notes analyst Mark Hanson.

(Read More: Is There a Housing Shortage?)

Hanson expects a drop-off in home sales this fall, due to lack of supply out West, where home sales had been fueled by distressed properties (foreclosures and short sales).

We are already seeing weakness. California home sales fell 16.5 percent in September from August and were down nearly 3 percent from a year ago, according to DataQuick. Foreclosure activity in California is at its lowest since 2007.

While the nation’s home builders are seeing improvements in gross margins and big gains in new orders, they are coming off such historic lows that their overall volume is still quite weak. Another problem is that investors rushed into the builder stocks the moment they got a whiff of any recovery last year.

(Read More: Is Housing Recovering as Much as Everyone Thinks?)

“Remember, valuation is a big issue now with these stocks at new highs. Data may continue to improve but stocks may stall out,” notes CNBC’s Bob Pisani.

The concerns in the market are manifold: What if mortgage rates rise? What if we fall off the fiscal cliff? What if lawmakers yank the mortgage interest deduction? What if new mortgage regulations tighten credit even further?

What if the shadow inventory of distressed/foreclosed properties moves onto the market faster? What if the unemployment picture doesn’t improve markedly?

(Read More: What Is the ‘Fiscal Cliff’)

“When you compare against 2011 (the tail-end of the homebuyer tax credit hangover and a double dip) when rates were at 5.25 percent versus 2012 with rates at 3.5 percent and supply artificially suppressed due to a surge in mortgage modifications, can-kicking of foreclosures, servicer settlement further reducing distressed supply etc, things are going to look really good,” argues Hanson. “But as the 2012 conditions go flat — rates, etc., turn into headwinds -— in 2013 and sales are not coming against a hangover, things will not look as great.”

Again, it is all about perspective.

—By CNBC’s Diana Olick; follow her on Twitter @Diana_Olick

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US Home Builders

—Toll Brothers
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—DR Horton
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—Hovnanian Enterprises
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—PulteGroup
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—Ryland Group
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—Lennar Corp
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—Beazer Homes USA
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—Meritage Homes
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—KB Home
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