Long-term mortgage rates tumbled to six-month lows this week amid concerns the economic expansion may be losing steam.

Defying expectations earlier this year that it would now hover around 6.5 percent, the average rate for the benchmark 30-year fixed mortgage fell from 5. 74 percent last week to 5.69 percent this week, according a weekly survey released Thursday by Freddie Mac, the second-largest buyer of mortgages in the country. This week’s rate was the lowest since the week of April 1, when the 30-year rate was 5.52 percent.

Sky-high oil prices, listless job growth and unease surrounding the Iraq conflict are reining in economic growth, experts say. As a result, yields on 10-year treasuries have dipped as more money has flooded into the bond market — considered a safer haven than other investments. Mortgage rates generally parallel yields on 10-year treasuries.

Clearly the economy is not as strong as it should be, said Sung Won Sohn. economist at Wells Fargo. Businesses and consumers are uncertain. And (Federal Reserve) Chairman (Alan) Greenspan says uncertainty is like walking into an unlit room. You stop and freeze.

On Thursday, the Conference Board, a private research firm in New York, said that its Index of Leading Economic Indicators, an important measure of future economic activity, fell 0.1 percent in September, the fourth consecutive decline. The report said average weekly initial claims for unemployment insurance increased and manufacturers’ new orders for consumer goods fell. The Labor Department. however, reported Thursday that new filings for unemployment insurance fell by 25,000 last week, to their lowest level since early September.

Despite the mixed signals on the labor front, many economists expect the Federal Reserve to raise the federal funds rate, the interest banks charge each other for overnight loans, a quarter-point to 2.0 percent at its next meeting in November. But after that, the Fed may pause, electing to make no move in December, and instead of boosting the funds rate by 1.25 to 1.5 points next year, spread that increase out over two years, said Doug Duncan. chief economist at the Mortgage Bankers Association.

At that rate, they can move in either direction, Duncan said. If there are worries about a recession, they have room to cut, yet they’re not so far from neutrality that they can’t pick up the pace again.

While some segments of the economy may be decelerating, however, low interest rates are boosting mortgage activity.

Mortgage applications across the nation rose almost 8 percent on a seasonally adjusted basis this week, according to the Mortgage Bankers Association, which is holding its annual conference in San Francisco next week. Purchase applications rose 5.8 percent, while refinancing applications jumped 10.6 percent, the trade group said.

Based on projections earlier this year for jobs and economic growth, many economists, including Michael Dardia. economist at Burlingame’s Sphere Institute. predicted the 30-year rate would be near 6.5 percent. As a result, many observers expected the housing market to cool as fewer people could afford higher prices.

Instead, disappointing job growth and slipping consumer confidence have underscored the fragility of the economic upturn. In that environment, rates have remained low, helping more buyers pay higher home prices. In the Bay Area, the median price for a single-family home reached $544,000 in September, just below the all-time record of $549,000 in June. Sales for homes and condos last month were 12,705, the highest count for any September in at least 16 years.

The longer rates stay at or near historic lows, the more you put off that pressure (on affordability), Dardia said. This props housing up longer.

Executive coach Michael Gaines had planned on buying a home in December or January. But after seeing how low interest rates had drifted, he and girlfriend Michelle Perez accelerated their timetable, purchasing a three- bedroom home in Mill Valley this month for $720,000.

I started thinking about it, and I was like, these are 40-year lows and if I can lock in for 30 years below 6 percent, I should just do it, Gaines said.

Even as the housing sector looks to continue shouldering a large portion of the economy, however, some experts fret that an increasing number of debt- laden households are at risk should the real estate market plunge — a la the Nasdaq meltdown several years ago. Discussion of the so-called housing bubble has reached such a pitch that Greenspan addressed the topic at a convention of community bankers Tuesday in Washington.

In effect, Greenspan said such fears are overblown, in part because homes are not bought and sold as easily as stocks.