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UPDATE 1-US home loan rates slide to record low-Freddie Mac

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NEW YORK, April 2 (Reuters) - U.S. mortgage rates slid to a record low during the past week, Freddie Mac said on Thursday, as concerted government steps to reduce borrowing costs take hold.

The average 30-year home loan rate fell 0.07 percentage point in the week ended April 2 to 4.78 percent, the lowest since Freddie Mac FRE.NFRE.P began tracking them on a weekly basis in 1971.

This rate is 1.10 percentage points lower than in the same week a year ago.

“Mortgage rates followed other interest rates lower this week amid reports of slower economic growth,” Frank Nothaft, Freddie Mac’s chief economist, said in a statement.

“Serving as a spur to sales, housing affordability reached an all-time high in February 2009,” based on a National Association of Realtors survey also dating from 1971, he added.

Sustained low mortgage rates are needed to quell the record foreclosure wave that has slashed home prices and sales.

Homeowners looking to cut costs by refinancing have already raced to apply for newer loans with lower rates, data from the Mortgage Bankers Association show.

The Federal Reserve’s program to buy up to $1.45 trillion of mortgage-related assets to help press and keep mortgage rates down has started working. Its purchases so far have approached 25 percent of its target amount and borrowing costs have fallen as a result.

The program is targeted for completion by the end of the year.

President Barack Obama’s $275 billion stimulus package also aims to stop the hemorrhaging in the weakest housing market since the Great Depression.

Home prices have plunged by about 30 percent since peaking in mid-2006, based on January Standard & Poor’s/Case-Shiller indexes reported on Tuesday.

Freddie Mac said the average interest rate on a 15-year loan dropped to 4.52 percent from 4.58 percent the prior week and from 5.42 percent a year ago. The rate was the lowest since Freddie Mac started tracking the 15-year loan in 1991.

Five-year adjustable Treasury-indexed hybrid loans averaged 4.92 percent, down from 4.96 a week ago and 5.59 percent a year earlier. This rate was also the lowest since it has been tracked by Freddie Mac starting in 2005.

Lenders charged an average of 0.7 percentage point on all of these loan types, unchanged in the week. (Reporting by Lynn Adler; Editing by Dan Grebler)