Low rates spur refinancing, buying Published in The Times on January 10, 2001. By David Westerfield The Times Local real estate agents, mortgage lenders experience hectic days. Interest rates are falling, new houses are rising and those in real estate -- from buyers and sellers to agents and lenders -- are working like toy store retailers on Christmas Eve. Mortgage rates have dropped to as low as 6.625 percent in the Shreveport area on a conventional 30-year loan. That’s created booming business in refinancing old loans and buying -- and building -- new houses. Those who signed loans last year at more than 8 percent interest can now lower their monthly payments. Many already have started the process. "It’s going to be a stampede. I’ve been on the phone nine solid hours," said Jim Reeves, a mortgage lender with Bank One. "The activity has doubled and tripled and it’s just now really getting started. It’s not yet, but I suspect there could be a logjam." The most recent Bankrate.com weekly survey showed a national average of 7.07 percent -- down from a five-year high of 8.69 percent last May. Those who missed out on the refinancing wave of 1998 are jumping at the chance to lower their monthly payments now. "When it gets below 7 percent, don’t split hairs -- get it done," Reeves said. "If you can do it and save money, do it now. They go up faster than they come down." Some lenders expect further drops in the rate -- but they also don’t recommend waiting for lower rates if there are other reasons to buy or refinance now. "There’s just as much risk that they will go back up," said Marcia Magee, vice president and regional manager at Hibernia National Bank. "This is the lowest rate I’ve seen in a long time. Our workload is getting ready to skyrocket. There are still a lot of loans out there that could benefit from this." Mortgage rates are affected by many variables, but typically fall as other rates do. When the Federal Reserve unexpectedly cut short-term interest rates last week a half-point, to 6 percent, the number of homeowners looking at refinancing took a jump. Others are looking at a move to a larger house that was unaffordable last year or a move into their first house. A 30-year loan taken at 7 percent interest, instead of 8.5 percent, for example, would save a home buyer about $103 every month. Homebuilding in Shreveport and Bossier City already has reached a high level and the lower rates could spark even more development. Residential building permits issued in both cities last year topped the 1999 numbers. "People can lock into these low rates and that’s good. People are fired up and builders are excited. Instead of building one at a time, you may build two or three," said Curtis Loftin, president of the Home Builders Association of Shreveport-Bossier City. "I think this will be an even stronger year for us. I have about all I can do for 2001 and others do too. This gets a lot of people to list their house and move into something bigger. It has people out looking." Realtor Nancy Harner, with Remax Realty One in Bossier City, said January would typically be a slow month in real estate, with home buyers not coming back out until spring. "We’re busy now -- the phones are ringing and people are looking. Interest rates are driving the market. You can get more for your money," Harner said. "I had an open house Sunday and a lot of people were out looking even though the weather was not great. I have several properties that will close this month and I know other offices are just as busy." Danny and Nelda Driggers have been considering making a move to a smaller property and the drop in rates has fueled that desire. "These rates are enticing. We are looking for something less than an acre and we want to be closer to town," he said. "The rates are a real incentive to go ahead, even if it’s not exactly what we want, but is close. That makes a lot of difference in a 15-year loan." Christy Herren, sales manager in the mortgage loan division of AmSouth Bank, said her office has been inundated with phone calls. "I don’t see rates going below 6 percent, but I think we may see them a bit lower. There are a huge number of people out there who could benefit," she said. "We have barely been able to breathe since rates went down."