And there's been a bump in activity in the past week with more people looking at homes or considering refinancing old loans, mortgage brokers and real estate agents said.

Richard Lerner, chairman and chief executive officer of BankAnnapolis, said he doesn't expect the "floodgates to open" but lower rates "can only be good in the long term."

"It's going to create more business and hopefully result in a sooner-than-otherwise-would-have-been recovery" of the housing market, he said.

Consider someone who puts down 20 percent for a $300,000 house.

If they had a 30-year mortgage on that home, they would pay $1,493 each month based on the 6.35 percent interest rate before the government's takeover of Freddie Mac and Fannie Mae last week.

That buyer would save about $100 per month on the payments under the same scenario with the current 5.73 percent rate quoted this morning by Bankrate.com.

"For the average consumer, the only difference they will experience is that the lower mortgage rates will be passed on to them," said Chris Howard, president of Bay Mortgage in Annapolis.Mr. Howard and others in the financial

and real estate community cheered the lower rates, saying they will boost activity and help turn around the local real estate market sooner than later.

Mr. Howard said he's already changed his projection for the fourth quarter of 2008 from "bleak" to "very upbeat."

"It really blows some wind into our sails right now," he said.

Tom Quattlebaum, chief executive officer of the Anne Arundel County Association of Realtors, said the takeover is "bound to help," adding that there's plenty of pent-up demand from buyers.

"If the confidence level continues and increases, the market is going to turn," he said.

Mike Hamby, principal of the Hamby Real Estate Group at Champion Realty in Annapolis, said appointments in his office have been up in the past week because consumers realize they can now refinance or afford to buy a house. Mr. Hamby also said he's seen hits on his Web site increase from 3,000 to 4,000 a day.

"I think it's because people are seeing interest rates come down," he said. "I'm not saying we're at the bottom, but if we start to see some of these first-time homebuyers come out, that's what I'm looking for."

Eric Edstrom, president of Annapolis Community Bank, said he also expects an uptick in business. He said he's already seen one customer who went to settlement on a home cancel that settlement and reapply for a lower mortgage rate after the takeover of Freddie and Fannie was announced, he said.

Fannie and Freddie own or guarantee about $5 trillion of the nation's outstanding mortgages, roughly half the total.

Last week, the government took over the two companies to prevent them from running into capital problems as a result of the national credit crunch. Interest rates tumbled as news of the takeover unfolded.

"Not only does (the takeover) reduce mortgage rates and assures the availability of credit, it averts a financial disaster," said Greg McBride, senior financial analyst for Bankrate.com. "If one of those entities were allowed to fail, mortgage lending would have come grinding to a halt."

The government's takeover of Freddie and Fannie comes after the Federal Reserve stepped in to help save investment bank Bear Stearns from failure in March. This week, investment banking firm Lehman Brothers announced it had filed for Chapter 11 bankruptcy and Bank of America said it was buying Merrill Lynch.

While the local financial community cheered news of the takeover, "the worst is not behind us," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute in New York.

"It doesn't mean the system is going to be very friendly to you in the near time," Mr. Achuthan said. "It is probably going to have tighter lending requirements. Your credit card limits are not going to increase. Your job security is probably going to decrease."

Mr. Achuthan's advice?

"Batten down the hatches for the next few months," he said. "We're likely to have a weak job market for the next few months at least."