Even though it doesn’t directly affect mortgage rates, Jan Metheny, co-owner of the Bethel Financial Group in West Des Moines, says every time Federal Reserve Board Chairman Alan Greenspan announces the Fed is slashing interest rates to stimulate a sputtering economy, business increases for his company and other home-related enterprises.

“People don’t realize that Alan Greenspan has nothing to do with interest rates, unless it’s refinancing,” he said. “But our business has almost doubled in the last few months because a lot of folks think low interest rates are tied to that.”

Metheny said the interest rates Greenspan cuts affect credit card rates and car loans, improving the sales of “cheap money.” Nonetheless, talk of lower interest rates, of any kind, indirectly stimulates the residential real estate market.

“There has been a market frenzy, even if it’s the wrong perception,” he said.

With interest rates remaining at decades-low percentages for loans for home purchases and refinancing, businesses like banks, title companies and home inspectors are reaping the benefits of an active residential real estate market, industry officials say.

Tom Nelson, assistant vice president and mortgage loan officer for Iowa State Bank, said interest rates for home mortgages and refinancings haven’t been this low in nearly 40 years. At press time last week, Iowa State Bank was offering 6.125 percent rates for 30-year loans of $100,000 and 5.5 percent rates for 15-year, $100,000 loans.

“Rates have been low the last couple of years, but since August, we’ve seen rates drop even lower,” he said. “It was a record year last year, but it looks like we’ll top that this year.”

Nelson said the bank’s loan officers have been inundated with customers because low interest rates have been available longer than before.

“Since rates are lower longer, it gives buyers more opportunity to hear about them and act upon them,” he said. “Word of mouth is big for us, because when people get a low rate, they refer their friends and family to us.”

Michael Hayes, president of West Des Moines-based Hayes Appraisal Associates Inc., said he has seen a noticeable increase in the number of homeowners who are refinancing their mortgages. Approximately 80 percent of his company’s business is residential appraisals.

“People are looking for more favorable interest rates because they want to clear up old debt or they want to reduce their interest rate and save a couple hundred bucks a month,” he said.

Hayes credits low interest rates for the increased volume in business, as well as the fact that consumers are more business savvy now than they were years ago.

“People are more sophisticated now,” he said. ” They’re more interest sensitive than they were in the 1970s. So when interest rates drop, the refinance market cranks up.”

Janet Wallace, director of market development for Iowa Title Co., said business has sharply increased since interest rates have dropped. She has seen an increase in the number of title certificates, abstract continuations, root title abstracts and pre- and- post-closing search certificates the company services.

“We’re seeing a lot of new home sales and a lot of refinancing, including people who are refinancing multiple times,” she said.

To handle the increased workload, the company has hired temporary workers. Last month, customer service representatives fielded more than 6,500 calls, 1,500 more than average.

“Even our traditional slow times aren’t slow anymore,” Wallace said. “And Realtors are saying they don’t anticipate a slowdown for 2003.”

Businesses that often work in cold weather this time of year are also heating up. Greg Guyler, owner of Amerispec Home Inspections, said inspections are up nearly 25 percent this fall compared with the same period over the last two years.

“We have felt an upswing in business,” he said. “We’re staying as busy as can be.”

Guyler said his company conducts more inspections than its competitors, but peak periods bring out “fly-by-night” operations trying to take advantage of the boom. “People jump in and out of this business because in Iowa you don’t need to be licensed to be a home inspector,” he said.

Guyler’s business, which opened in 1997, is a licensed company that works with several residential real estate brokerages, including Iowa Realty, the state’s largest. The company’s three employees inspect about eight homes a day, five days a week. Guyler said business has grown steadily as interest rates have declined, making for an unusually busy holiday season.

“I’m fortunate we work in the real estate market,” he said. “The more homes that are being sold, the more homes are being inspected.”