Spokane-area homeowners are flocking to local lenders as they seek to take advantage of mortgage rates at or near historical lows.

With the stock market on a daily roller coaster, the shaky financial climate has chased investors into the safety of U.S. Treasurys, leading to a record low average on the 30-year fixed mortgage rate of 3.29%.

“Refinances are up over 200 percent this year alone, year over year,” said Tony Byrne, a loan officer for Heritage Home Loans in Spokane. “If your rate starts with a 4, then refinancing probably makes sense. Almost every estimate I have run this week has made sense.”

Refinancing a home generally only pencils out if a homeowner can cut his or her current interest rate enough that it saves money over time. It could also make sense to pay a bit more for a mortgage that could pay off other debts, such as student loans and car payments, he said.

Byrne noted anyone who has questions about refinancing could talk with a loan officer to get an idea about whether it makes sense before moving forward.

“If you are thinking about refinancing, I think it’s best to get the process started,” he said. “It’s best to get going because the end of this could happen any time.”

The Dow Jones Industrial Average finished up about 1,294 points on Tuesday before falling about 786 points on Wednesday and another 970 points on Thursday.

That volatility has pushed investors into other safer havens, leading to the lower rate on the 30-year fixed mortgage. Similarly, Freddie Mac’s survey showed the average rate for a 15-year fixed mortgage had fallen to 2.79%, which is the lowest level since 1991.

Darren McNannay, the director of real estate for Spokane Teachers Credit Union, said his office has been flooded with homeowners seeking to take advantage of the low rates.

Two weeks ago, STCU had 45 homeowners initiate the process to start a refinance. Last week, that number more than doubled to 95. On Monday and Tuesday this week, another 95 homeowners did the same.

“I expect by the end of the week that we will triple what we did last week,” McNannay said. “Obviously, it’s rate driven.”

Those borrowers with the best credit could get average percentage rates as low as 3.125% for a fixed 30-year mortgage and 2.83% for a fixed 15-year mortgage rate at STCU, he said.

Byrne, of Heritage Home Loans, said those numbers make it possible for Spokane-area homeowners to refinance their existing 30-year mortgages into a shorter 15-year mortgage, which could save hundreds of thousands of dollars over the life of a standard loan.

“The other thing is that home values are way up,” he said. “So, there’s an opportunity to take some cash out of your home and pay off some debt and reduce your total output.”

The obvious question is whether the rates could go even lower as investors continue to react to news surrounding the COVID-19 virus outbreak.

The Fed also had a surprise cut this week in its key short-term rate by a sizable half-point in an effort to shore up consumer and business confidence and prevent a potential economic downturn.

The central bank’s rate cut, which tends to influence many loans for corporations and individuals, was the largest since the 2008 financial crisis. Most investors and economists expect the Fed – and other central banks around the world – to follow up with further rate cuts in the coming months.

Byrne said he believes the economy has yet to see the full impact of this crisis.

“The fear and the stuff that is happening with the coronavirus with the stock market, it hasn’t hit the job numbers. The bottom will happen with the jobs reports start getting worse and unemployment goes up,” he said. “That’s when it could get ugly.”

Already, news reports have surfaced of people canceling flights and not going to restaurants. Amazon has asked its employees in Seattle to work from home.

“As soon as the vaccine comes out, the stock market goes right back up,” Byrne said. “But that could be 12 months from now.”

The lower interest rates also help someone purchasing a home, which is difficult right now with so few homes on the market in the Spokane area, he said. A consistently low number of available homes has driven up the price in what is solidly a seller’s market.

“I’m a Spokane native. If I look at homes, I’m like: ‘I’m not paying that much for that house,’” Byrne said. “But again, with the lower rates, it maybe takes the sting out of that and knocks the (mortgage) down because the rate is lower.”