Mortgage rates fell slightly this week on news of job losses in December and deteriorating business conditions in January, Freddie Mac reported today.

The average rate on 30-year fixed mortgages sank to 5.67 percent from last week’s 5.68 percent, and the average 15-year fixed mortgage rate slipped to 5.15 percent from 5.17 percent. A year ago, the 30-year fixed averaged 6.28 percent and the 15-year averaged 6.02 percent.

This week, points, or fees that lenders charge for loan processing expressed as a percent of the loan, averaged 0.4 on the 30- and 15-year loans.

“Long-term mortgage rates were little changed this week, largely in sync with the movements in the Treasury bond yields during the same time,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a prepared statement. “Additionally, economic news released in the past week showed that the economy continues to be weak.

“Non-farm payroll employment fell by 17,000 jobs in December, the first month of job loss since August 2003 while the Institute for Supply Management’s nonmanufacturing business activity index showed a contraction in this sector last month, the first since March 2003 and the lowest index level since October 2001,” Nothaft said. “The Federal Reserve’s Senior Loan Officer Opinion Survey for January reported further tightening of lending standards in residential mortgages over the prior three months, with 53 percent of respondents indicating a tightening of credit in the prime mortgage market, up from 41 percent in the October survey. And 70 percent of those surveyed expect deterioration in credit quality for prime residential mortgages in the coming year.”

According to Freddie Mac, adjustable-rate mortgages (ARMs) also sank this week. The average five-year Treasury-indexed hybrid ARM fell from 5.32 percent to 5.21 percent, and was 5.99 percent a year ago. The one-year Treasury-indexed ARM declined from an average 5.05 percent last week to 5.03 percent, and was 5.49 percent this time last year.

Points on the five-year and one-year ARMs averaged 0.4 and 0.5, respectively.

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