AP

The New Home Sales report today was nothing short of exceptional.

The number beat all expectations and beat them by a lot.

The home buyer tax credit clearly favored the builders over existing home sellers, as the jump in new construction sales seem far higher.

So are the builders back? Not so fast.

Before everyone goes calling me a big bad bear, barely 7 minutes after the report was released, the analyst reaction came flooding in.

"As seen with the purchase component of the weekly MBA data, the May data will show a sharp decline," writes Peter Boockvar of Miller Tabak. "We know a hangover is coming, but we don't know what happens after."

In fact, mortgage purchase applications are at a thirteen year low, falling off precisely post tax credit.

Purchase applications are now barely 27 percent of all mortgage applications, with refis surging on low interest rates.

Anecdotally, we're hearing that buyer traffic in new models also slowed dramatically.

And even lumber is proving a leading indicator.

"We have seen spot lumber prices drop 25 percent since the end of April," notes Buck Horne of Raymond James.

Lumber saw a big run-up in price, 46 percent from January through April, according to Random Lengths data. And at the Chicago Mercantile Exchange, lumber futures have trended sharply lower since late April "on worries that expiration of the tax credit would slow home sales," according to Reuters.

On the other hand, Toll Brothers

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[TOL  Loading...      ()   ] reported strong order growth of 41 percent year over year. Toll's high end homes wouldn't be affected much by the tax credit, so perhaps that's real organic demand.

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