Demand Propels Home Prices Upward 2 days ago Home / Daily Dose / Existing-Home Sales Continue Surge While First-Time Buyer Sales Fall Print This Post Existing-Home Sales Continue Surge While First-Time Buyer Sales Fall Sign up for DS News Daily Existing-home sales rose higher in July, while low inventory levels and rising prices are the largest factors lowering sales to first-time buyers to their lowest share since January, according to a report from the National Association of Realtors (NAR) released Thursday.Total existing-home sales rose 2.0 percent to a seasonally adjusted annual rate of 5.59 million in July from a downwardly-revised 5.48 million in June. July sales were at the highest pace since 5.79 million in February 2007. Existing sales have now increased year-over-year for 10 consecutive months and are 10.3 percent above the pace a year ago at 5.07 million.The report also found that single-family home sales increased 2.7 percent to a seasonally adjusted annual rate of 4.96 million in July to their highest level since 5.08 million in February 2007. Single-family sales were 4.83 million in June, and are now 11.0 percent above the 4.47 million pace a year ago.Source: NAHBMany economists believe that the growth in existing-home sales can be mostly attributed to growth in the employment sector.“In some markets, this boost has been led by job growth –a key sign that the recovery is on track,” said Selma Hepp, Trulia’s chief economist. “As millennial employment improves, young adults will continue to move out of their parents’ homes and form their own households, first as renters and then as homeowners.”Lawrence Yun, NAR chief economist, added, “The creation of jobs added at a steady clip and the prospect of higher mortgage rates and home prices down the road is encouraging more households to buy now. As a result, current homeowners are using their increasing housing equity towards the down payment on their next purchase.”According to the NAR, the median existing-home price for all housing types in July was $234,000, which is 5.6 percent above July 2014. This in increase marks the 41st consecutive month of year-over-year gains. The median existing single-family home price was $235,500 in July, up 5.8 percent from July 2014.”Despite the strong growth in sales since this spring, declining affordability could begin to slowly dampen demand,” Yun said. “Realtors in some markets reported slower foot traffic in July in part because of low inventory and concerns about the continued rise in home prices without commensurate income gains.”“The creation of jobs added at a steady clip and the prospect of higher mortgage rates and home prices down the road is encouraging more households to buy now.” —Lawrence Yun, NAR chief economistNAR reported that total housing inventory declined 0.4 percent to 2.24 million existing homes available for sale at the end of July. This total is now 4.7 percent lower than a year ago when inventory levels reached 2.35 million.“Tight inventory across the country continues to put pressure on home prices,” Hepp said. “As more potential buyers are being pushed out of the market, home sellers may be reluctant to sell if there is a perception that they might not be able to find another home to buy–thus perpetuating the problem.”Another decline was recorded in the percent share of first-time buyers in July for the second consecutive month. First-time buyers in July lowered to 28 percent from 30 percent in June, the lowest share since January of this year which was 28 percent.”The fact that first-time buyers represented a lower share of the market compared to a year ago even though sales are considerably higher is indicative of the challenges many young adults continue to face,” Yun said. “Rising rents and flat wage growth make it difficult for many to save for a down payment, and the dearth of supply in affordable price ranges is limiting their options.”Lisa Edwards, director of business strategy with Forsalebyowner.com, told DS News that she believes that challenges will always persist with first-time homebuyers. She also added that market conditions like “faster wage growth, continued relaxed lending standards, and interest rates hovering around 4 percent” will be needed to reach first-time buyers.Click here to view the complete NAR report. 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Trinidad-based Caribbean Airlines Limited (CAL) remains firm in its position not to flout Transportation Security Administration (TSA) regulations, despite a 21-day ultimatum delivered by the Cheddi Jagan International Airport (CJIA) regarding duty-free items purchased by outgoing passengers at Guyana’s main airport.The CJIA threatened to terminate its agreement unless the carrier rectifies a situation where the passengers are forced to relinquish the duty-free items in Trinidad.“Accordingly, take notice unless CAL remedies its aforesaid default and comply with the said notice of June 15, 2015 within 21 Days of this notice to remedy default, CJIAC will be at liberty to proceed to cancel the air carrier agreement under article 9.3 thereof,” the airport management’s said in a letter to the airline last weekThe letter also highlighted that passengers, under CAL and CJIA security supervision, would be allowed to have their duty-free items secured in their checked luggage.It was noted that before an agreement was made, numerous discussions were made involving local law enforcements, duty-free concessionaires and Trinidad and Tobago Civil Aviation Authority, Caribbean Airline personnel and representatives.But in a response, CAL, which has been flying to Georgetown since 2007, said that while Guyana remains an important destination and the airline remains committed to its Guyanese customers, it must comply with all regulatory directives of the sovereign states into which it operates, as do all other international airlines.It pointed out that one such regulatory body is the TSA, which governs the security processes and conducts audits for all carriers flying into the United States of America.The airline added that in light of screening rules which are in accordance with TSA measures being applied at any Last Point of Departure (LPD) to the United States, and a recent TSA audit, a restriction on the entry of transit duty free into the sterile holding areas of all transit airports has been imposed.“Consequently, customers departing from Guyana or any other Caribbean destination with duty free items who are connecting on flights to the United States on any airline cannot enter the sterile holding area of any airport through which they transit en route to the United States,” the airline indicated.The Trinidad-owned airline said that while it sought to balance its regulatory obligations with its customers’ desire to make duty-free purchases, this proved to be challenging as it resulted in items remaining unclaimed at the final destination, as well as damage to fragile items.“Customer comfort and convenience are top priorities of Caribbean Airlines and we continue to collaborate with stakeholders, including the Civil Aviation and Airport authorities, to achieve a workable solution to ensure we remain compliant with the TSA regulations and provide quality service to our valued customers,” the statement added.Last week David Patterson, the Guyanese Minister with responsibility for the aviation sector, explained the genesis of the controversy.“The issue stems from duty free concessions. There has been a long-standing issue with Guyanese whereas when we travel to Trinidad, we deplane and go through the security checks in Trinidad. What is being implemented now is that when you go through, you’re asked to take out your baggage, and when you take out your baggage it will include the duty-free concessionaries from Guyana. Currently, the regulations are that you cannot carry anything over ten fluid ounces,” he related.He explained that it became an issue of national interest after travellers complained that when they pass through security in Port of Spain, they are unable to carry their purchases from Guyana; particularly alcoholic beverages even though it is in compliance with the regulations. As such, these passengers lose their products at security after it is rejected during screening.He went on to point out that even though similar issues arise at other airports, those airports usually make accommodations for these passengers.Minister Patterson added that on several occasions, the CJIA approached the airline with several suggestions in attempts to resolve the conflict; however, these suggestions were ignored and the issue was left unresolved.“What is being suggested is that Guyana, CJIA and Caribbean Airlines reach some form of accommodation that if you bought products in Guyana legally, verifiably and it comes in a sealed package, the airport would collect it from you and return it as you deplane at your final destination,” he explained..This proposal, the minister revealed, was put to Caribbean Airlines and they attempted to implement it but in the end they refused to proceed.“We do believe that Guyanese travellers have rights as well and we believe that what applies in any other airport and any other airline should apply to us. We do believe that we can have a resolution; unfortunately none has been reached so far,” the minister stated.Minister Patterson pointed out that the decision to present CAL with an ultimatum was made after months of deliberations by CJIA’s board, as none of the proposals made by the airport were finding favour with CAL.He further expressed hopes that CAL will seek to resolve the issue within the stipulated timeframe so as to avoid further conflicts.In 2013, Guyana granted the Trinidad-based airline “flag carrier status” with CAL transporting over 350,000 passengers to and from Guyana annually.