The housing recovery may well be under way, but nobody said it'd be smooth sailing. If there was any doubt about that, then the performance of D.R. Horton's (NYSE:DHI) shares today should clear things up. After the nation's largest homebuilder reported earnings for the fiscal third quarter this morning, investors and traders responded by sending its shares down by more than 8%.

You'd be excused for concluding that the market's response to D.R. Horton's earnings was an overreaction. For the three months ended June 30, the company earned $146 million, or $0.42 per diluted share. While this was 97% less than the same period last year, it handily beat the consensus estimate of $0.34 per share. In addition, the year-over-year comparison is rendered largely meaningless by a $716.7 million tax benefit the company recorded in the third quarter of 2012.

More importantly, orders for new homes -- which is a key leading indicator for homebuilders given that they don't book revenue until closing -- climbed by 12% over the quarter to 6,822. By comparison, PulteGroup (NYSE:PHM), which also reported earnings today, said its orders declined by a similar magnitude. On top of this, as you can see in the chart above, D.R. Horton increased the number of homes it closed on by 30% to 6,464, and its backlog shot up by 36%.

All things considered, in turn, at least from a fundamental perspective, it was a good quarter for the megahomebuilder.

So what are investors all worked up about today? It's hard to say, other than to assume that it had to do with Pulte's lackluster performance on top of the Commerce Department report yesterday, which showed that new-home prices declined last month and could thereby threaten homebuilder margins going forward.