Mortgage rates ease again on rising unemployment

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If you’re strong enough financially to qualify for a home loan, the latest round of bad economic news has done you a favor: Mortgage rates have fallen again, Freddie Mac said in its latest weekly survey.

Lenders were offering the 30-year fixed-rate mortgage to solid borrowers at an average of 4.51%, down from 4.60% last week, Freddie Mac said Thursday morning.

The 18,000 jobs added to U.S. payrolls in June were well below what most economists had expected, and the 9.2% unemployment rate was the highest since December.

‘In addition, employee wages stagnated,’ said Frank Nothaft, Freddie Mac’s chief economist. ‘These factors may lead to less consumer spending, which in turn, reduces the threat of inflation in the near term.”

The yield on the 10-year Treasury bond, a benchmark for mortgage rates, was up slightly early Thursday but remained near its low for the year. Financial markets appeared little ruffled so far by a threatened downgrade to the country’s debt rating -- an event that could drive Treasury yields higher, with mortgage rates following.

The 15-year fixed mortgage, an attractive option for many homeowners who are refinancing, was being offered at a typical rate of 3.65% compared with 3.75% last week, Freddie Mac said.

Borrowers would have paid 0.7% of the loan balance in upfront lender fees and discount points to obtain the 30-year loan and 0.6% in fees and points on the 15-year loan, Freddie Mac said.

Variable interest rates also fell this week, the survey indicates.

Freddie Mac’s report comes amid signs of life in Southern California’s housing markets and a national slowdown in foreclosures, as major banks try to negotiate a settlement with regulators over their repossession practices.

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-- E. Scott Reckard