Mortgage Rate Trend Index  July 10, 2009 – Average rates for 30-year mortgages fell for the second-straight week, but still remained above record lows reached earlier this year, Freddie Mac said Thursday.

The average rate for a 30-year fixed home loan was 5.2 percent this week, down from 5.32 percent last week, Freddie Mac said. At this time last year, the average rate for a 30-year fixed mortgage averaged 6.37 percent.

Rates on 30-year mortgages fell to a record low of 4.78 percent earlier this year, spurring refinance activity.

But rates then rose as high as 5.6 percent in June after yields on long-term government debt, which are closely tied to mortgages rates, climbed as investors worried that the huge surplus of government debt hitting the market could trigger inflation.

Since then, the yield on the 10-year Treasury note has fallen back from an eight-month high of 4.01 percent reached in June to 3.38 percent on Thursday.

Frank Nothaft, Freddie Mac’s chief economist, said rates for 30-year fixed-rate mortgages fell for the second week in a row to the lowest level in six weeks “amid market concerns over a weakening labor market.”

“The weak employment situation coupled with declining home values in many markets has added to greater defaults on home equity loans and lines of credit,” Nothaft said.

The American Bankers Association reported that the number of home equity loans that were 30 days or more delinquent rose to a record high of 3.52 percent in the first quarter, Nothaft noted.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

This week, the average rate on a 15-year fixed-rate mortgage fell to 4.69 percent, down from 4.77 percent last week, according to Freddie Mac.

Average rates on five-year, adjustable-rate mortgages were 4.82 percent, down from 4.88 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.82 percent from 4.94 percent.

The rates do not include add-on fees known as points. The nationwide fee for 30-year and 15-year fixed rate mortgages averaged 0.7 point, while the fee for five-year and one-year adjustable rate mortgages was 0.6 point.