EVEN THOUGH both house-for-sale signs and prime interest rates have been on the rise, mortgage rates are heading downward.

And those rates should remain fairly stable throughout next year, helping to reinvigorate the local housing market, some national and local mortgage experts say.

Sky Bank has had activity from area customers buying existing and newly built houses, as well as people locking into rates on adjustable-rate mortgages and taking out second mortgages or home equity loans, said Michael Rose, executive vice president.

"There's a fair amount of volatility in the market, but we're fairly positive about the outlook," he said.

Last week, 30-year fixed-rate mortgages averaged 6.11 percent, the lowest since mid-January's 6.1 percent, according to Freddie Mac.

The 15-year fixed-rate mortgages last week averaged 5.84 percent, the lowest they have been since 5.83 percent in early February.

Mortgage rates are declining nationwide because the housing market, automotive production, and manufacturing overall have slowed, said Nela Richardson, senior economist at Freddie Mac.

The market, she added, is moving to favoring buyers, with more attractive prices and more houses from which to choose.

Both factors can be found locally.

Prices of Toledo area homes dropped 0.75 percent in the third quarter, according to the Office of Federal Housing Enterprise Oversight.

And housing inventories built up nationwide as sales of existing homes slipped in Ohio, Michigan, and most other states in the same three-month period, according to the National Association of Realtors.

Sales were down more than 9 percent in Ohio last quarter from a year ago and more than 17 percent in Michigan, it said.

Yet rates for 30-year mortgages this year peaked at 6.76 percent in July before sliding to 6.24 percent last month, according to Freddie Mac.

The rates were at 6.15 percent in January, the lowest point this year, but still higher than in the first 10 months of 2005 and the last half of 2004, it said.

Next year, 30-year mortgage rates will average an estimated 6.3 percent, with much of that slight increase occurring in the second half of 2007, Ms. Richardson said.

Mortgage rates, which unlike the prime interest rate are tied to Treasury bonds, should remain relatively low into 2008, she added.

Meanwhile, the Federal Reserve's policy-making committee will meet this week to decide the benchmark federal funds rate on overnight bank loans, which is used by banks to set the prime rate.

The benchmark has risen a percentage point this year from 4.25 percent last December.

Freddie Mac estimates the U.S. housing market is about two-thirds of the way through a correction, and housing starts and sales should pick up about halfway through next year, Ms. Richardson said.

For now, the local housing market isn't easy, but more people are calling to inquire about mortgage rates, said Bob Duck, branch manager of the Holland office of Colony Mortgage Corp.

"There's still a large contingent of first-time home buyers out there," he said. "All they have to do is find the right house."

Finding the right mortgage is part of the equation, too, Mr. Duck said. Mortgage rates for first-time buyers are less than 6 percent through a state program, and federal loans are around that mark, he said.

"People have to really search out and see what program is the best for them," he said.

Volumes at Wells Fargo Home Mortgage in Toledo held nearly steady this year compared with last, and next year should improve, said Tony Brancatto, branch manager.

Home-loan rates likely will oscillate some next year, but housing prices will stabilize and refinancing will pick up, he said.

"We've already started to see that," Mr. Brancatto said of refinancings.