Headlines and a deadline

As reported last week the Idaho Association of Realtors successfully lobbied for developers with infrastructure in their subdivisions to be taxed at the lower, "business inventory" rate. If you are a developer, you are nearly out of time to apply for this exemption. The deadline is May 1, next Tuesday!

Competition is brisk for low-end properties. Realtors attending the first Realtor Technology Camp at The Coeur d'Alene Resort this past week reported being very busy, with one commenting, "It feels like 2004." According to the National Association of Realtors this trend is consistent in most parts of the country. Housing affordability is at record highs, due to falling home values and mortgage rates hovering near record lows. More buyers are taking notice and jumping off the sidelines. And mixed with sinking inventories of homes listed for sale, the competition is getting more fierce. Investors are snapping up bargain prices, often in all-cash deals, which means greater competition for traditional homebuyers too.

"Rents are going up, and as long as there are properties at the level where investors can get the positive cash flow, they will continue to invest," says Jed Smith, managing director of quantitative research for the National Association of Realtors. Smith adds that first-time homebuyers, in particular, may find increased competition from investors in trying to snag some of the best deals on the market.

Recent surveys have shown that buying a home nowadays is more affordable than renting. As such, more renters are finding home ownership more enticing. The signs are already starting to show: About 59.5 percent of tenants recently surveyed say they intend to renew their leases this year, which is the lowest rate since early 2009, according to a study by Kingsley Associates.

We notified you a month ago that FHA rates were going up. Fannie Mae, Freddie Mac and the Federal Housing Administration recently have raised their loan fees, which means homebuyers can expect to pay a little more for their mortgage this spring. "Those who don't have credit scores in the high 600s to low 700s may be forced to go the FHA route," says Ed Conarchy, a mortgage planner at Cherry Creek Mortgage. "And they will be stuck with the higher fees."

Buyers with smaller down payments can expect to pay more for FHA mortgage insurance premiums, which have risen to 1.75 percent of the loan total. Bankrate.com cites an example illustrating the higher fees: A borrower who takes out a $200,000 FHA loan will likely have to pay about $3,500 for mortgage insurance upfront. Prior to the increase taking effect, borrowers would pay about $2,000 for that same loan amount.

Borrowers with higher mortgages can expect higher fees too. The FHA announced that in June it will increase its annual insurance for mortgages more than $625,500. "A borrower who lives in a high-cost area and takes out the maximum $729,750 (which is the FHA limit for high-cost areas) will pay $912 each month in mortgage insurance alone," Bankrate.com reports.

Even so, this past week saw mortgage rates hovering near historic lows. Fixed-rate mortgages dropped slightly, nearing their average all-time lows and helping to lift homebuyers' purchasing power, Freddie Mac reports in its weekly mortgage market survey.

For every week but one this year, the 30-year fixed-rate mortgage, the most popular choice among homebuyers, has been below 4 percent. A Friday check of the IHFA.org website shows the rate for government guaranteed loans still at 3.75 so housing remains more affordable than ever. With brisk sales in the lower price categories though, we risk absorbing inventory and creating a housing shortage in that segment should unemployment decline.

Trust an expert... call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.

Kim Cooper is a real estate broker and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling (208) 667-0664.