Charlotte-area mortgage brokers on Monday scanned the news and juggled calls from borrowers wondering whether interest rates would keep falling or start climbing.

Mortgage rates dipped to record lows last week – a rare bright spot for consumers in an anemic recovery – as the debt-ceiling debate ended and economic troubles persisted nationally and globally.

But new uncertainty surrounding the nation’s downgraded credit rating and free-falling stock markets had some wondering whether those levels will hold.

“Interest rates are all about risk,” said Keith Luedeman, chief executive of the Charlotte online mortgage lender Goodmortgage.com. “Generally, to take more risk, people want more return, which means a higher rate.”

Rates fell to historic levels during the recession and have remained there as economic worries pushed investors toward the safety of U.S. Treasury securities. Interest rates began to climb on Friday as buzz about the Standard & Poor’s credit downgrade spread, Luedeman said.

But by Monday morning, they’d dipped again, suggesting people “still think U.S. debt is a good bet,” he said.

Charlotte-area rates for a new 30-year, fixed-rate mortgage ranged from about 4.22 to 4.71 percent Monday, according to Bankrate.com, an aggregator of interest rates and other financial information. The national average was 4.54 percent – and some alternatives, such as shorter-term fixed mortgages and adjustable-rate mortgages, hovered close to 3 percent, the site said.

The last time mortgage rates topped 6 percent was in November 2008, Bankrate said.

Lower rates have meant a welcome boost for mortgage lenders, fueling an increase in refinances and providing an incentive for home shoppers who are debating whether to buy.

At Goodmortgage.com, call volume climbed as much as 70 percent in recent days as customers scrambled to lock in low rates.

Business at Charlotte-based LendingTree LLC grew in July and climbed further last weekend as word spread about low interest rates and customers began to “get off the fence and try to refinance,” CEO Douglas Lebda said.

Despite the S&P downgrade, U.S. investments still seem favorable relative to the troubles in Europe, he said. Lebda doesn’t anticipate a jump in interest rates, but he said it’s always difficult to call a bottom. It’s usually in homeowners’ best interest to be ahead of the curve in terms of refinancing, as work can pile up at short-staffed mortgage companies, he said.

And even if rates keep falling, their current levels remain far below what they’ll likely be in five or 10 years, Lebda said.

“The long-term trends for interest rates, certainly, they have to go up,” he said. “If you can save money on a monthly basis or lock in a monthly rate, there’s no reason not to.”

Bill McConnell, who runs mortgage firm Element Funding’s Charlotte office, hasn’t gotten a flood of phone calls, mainly because many customers who wanted to refinance already have, he said.

He doesn’t expect interest rates to rise sharply anytime soon, but he said it remains to be seen how the latest economic developments will play out.

“It’s kind of like watching a wreck happen, but it’s happening slowly … and you can’t do anything about it,” he said. It will likely take a sustained stream of good news to boost interest rates, and that’s not likely in the near future, said Lisa Green, vice president of loan origination at Allen Tate Mortgage.

A bigger concern, in the meantime, is whether the credit rating downgrade and sliding stock market will affect consumer confidence – and therefore further delay big purchases such as new homes, she said.

When interest rates do start to rise, it might not be a bad thing for the still-struggling housing market, Green said.

“It’s interesting, because we still are and have been at historic lows,” she said. “So actually, a little increase in interest rates might get some people off the fence.”

Kirsten Pittman: 704-358-5248

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