New homes sales fall in May; appraisals of greater concern than interest rate increases?

May numbers for new home sales are in; results prove what we've been seeing in the past month due to interest rate increases (as I'm sure will be the case for resale as well):

Battered home builders in the U.S. got even more bad news Wednesday: new-home sales fell unexpectedly in May [Ed. note: not unexpected for HighRiseSF followers], showing the sector must continue searching for stability as it limps through the worst downturn in generations.

Single-family sales decreased 0.6% from the prior month to a seasonally adjusted annual rate of 342,000, the Commerce Department reported. That's below the 360,000 economists had expected.

Year-over-year, new-home sales were 32.8% lower than the level in May 2008.

In addition, there is growing concern over sales lost due to new appraisal guidelines. Dan Oppenheim, analyst with Credit Suisse, sees this a potential roadblock to real estate recovery:

"We see low appraisals as a key issue we think will disrupt closings and hurt pricing for some time given the more stringent appraisal guidelines enacted last month. This will likely mean that many orders signed in recent months may not result in closings."

Recovery is looking more and more fickle. What does that mean for buyers and sellers? Chances are the best deals are still on the horizon and that we'll see further price decreases nationwide, which could very well pull equities lower in the coming months (and subsequently lead to lower interest rates again).

SOURCE: CNN MONEY