U.S. mortgage rates tumbled to the lowest in at least four decades as stagnant job growth and concern that Europe’s debt crisis is deepening drove investors to the relative safety of government bonds.

The average rate for a 30-year fixed loan dropped to 4.12 percent in the week ending Thursday from 4.22 percent, Freddie Mac said. That’s the lowest in the company’s records dating back to 1971. The average 15-year rate fell to 3.33 percent from 3.39 percent.

Yields on 10-year Treasury bonds, a benchmark for consumer loans including mortgages, touched an all-time low Tuesday on signs that the U.S. economic recovery has stalled and the euro region is struggling to contain its debt burden. Low borrowing costs have done little to lift the housing market as the unemployment rate sticks above 9 percent. No new jobs were added in August, the Labor Department said last week.

“Home buyers are not responding to these record-low interest rates,” said Patrick Newport, an economist at IHS Global Insight. “The reason interest rates are dropping recently is that the outlook for the economy has gotten weaker. A smart person would be very careful about buying a home unless he thinks his job is very secure.”

The previous low for a 30-year fixed mortgage was 4.15 percent for the week that ended Aug. 18. Data from the National Bureau of Economic Research measuring Federal Housing Administration loans indicate that long-term borrowing costs are the lowest since the 1950s, according to Chad Wandler, a spokesman for Freddie Mac.

Mortgage applications dropped 4.9 percent in the week ended Sept. 2, the Mortgage Bankers Association said Wednesday. The group’s refinancing index fell 6.3 percent while the purchase gauge rose 0.2 percent, a second straight gain after falling to the lowest level since December 1996.

The number of contracts to purchase previously owned homes in July fell 1.3 percent, the first decline in three months, the National Association of Realtors said Aug. 29.

“The housing market remains challenging primarily due to uncertainty caused by general domestic economic and political concerns, stock market volatility and turbulent international economic conditions,” Ara K. Hovnanian, chairman and chief executive officer of home- builder Hovnanian Enterprises Inc., said in a statement Wednesday. “We see very few indicators that any recovery in the housing market has begun.”

This article appeared on page D – 3 of the San Francisco Chronicle