Lyric discussion by Bravura 

Cover art for Stupid lyrics by Toad the Wet Sprocket

I love this song. Sounds to me like it's about a guy (the narrator) who's been working on finishing up his house with this other guy. And it just so happens that this other guy has been with the narrator's lady. He's singing about how he didn't notice until later that they had been together, thus making him feel "really stupid now".