U.S. Mortgage Rates Fall to Lowest in Three Decades (Update2)

By Kathleen M. Howley

Dec. 31 (Bloomberg) -- U.S. mortgage rates dropped to the lowest in more than three decades as the government stepped up efforts to revive the housing market.

The average rate on a 30-year fixed mortgage tumbled for a ninth straight week, to 5.10 percent from 5.14 percent a week earlier, Freddie Mac said in a report today. That’s the lowest on record, according to data that goes back to 1971, the McLean, Virginia-based mortgage buyer said.

The Federal Reserve is buying $500 billion of mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae in an attempt to lower mortgage rates and curb the housing slump at the center of a yearlong U.S. economic recession. Low borrowing costs may not be enough to offset 2008’s loss of 1.9 million jobs, said Michael Darda, chief economist at MKM Partners LP in Greenwich, Connecticut.

“You can’t get a mortgage if you’ve lost your job,â€