Mortgage rates keep falling

How low can they go?

Fixed mortgage rates fell for the eighth straight week in Freddie Mac’s widely followed survey of lenders, with the 30-year home loan below 4.5% for the first time since early December.

Freddie Mac said Thursday that the average rate being offered to well-qualified borrowers was 4.49%, down from last week’s 4.55%. Loans fixed for 15 years were at an average rate of 3.68%, down from 3.74%.

Borrowers would have paid 0.7% of the loan amount in upfront lender fees and points to obtain the rates, Freddie Mac said.

Adjustable loan rates also sank. Mortgages with a rate fixed for the first five years were starting at 3.28%, down from 3.41% last week. The start rate for a loan that adjusts annually was 2.95%, down from 3.13%, Freddie Mac said. Borrowers would have paid lenders an average of 0.5% on those loans.

Freddie Mac economist Frank Nothaft attributed the trend to weakness in the economy. Mortgage rates tend to track the yields on Treasury bonds, which were held down this week by a report showing disappointing jobs creation, Nothaft said.

The yield on the 10-year Treasury note — a key benchmark for home lending rates — has dropped below 3% on several occasions this month, also for the first time since early December. The 10-year yield was up slightly Thursday but still a hair below 3% at the close of trading.

Freddie Mac asks lenders each week to report the rates they are offering to borrowers with good credit and 20% down payments or 20% home equity in the case of refinancings. Solid borrowers who shop around often negotiate slightly lower rates, and rates also can be lowered by paying more to the lender upfront.

scott.reckard@latimes.com