Mortgage rates for the average US homeowner are higher now than at the beginning of the credit crisis a year ago, despite massive interest rate cuts by the Federal Reserve and a string of other efforts to kick-start credit markets.
And with the fate of the massive mortgage finance giants Fannie Mae and Freddie Mac hanging in the balance, analysts are concerned that relief may not soon be at hand.
These issues go to the heart of the credit crisis, since stubbornly high interest rates have contributed to the collapse in demand for housing, a downward spiral of house prices and the wiping out of $400bn (£213bn) of investment in mortgage derivatives.
The problem is dominating discussion as Federal Reserve governors meet to chew over the credit crisis at their annual symposium in Jackson Hole, Wyoming. Credit markets are particularly nervously awaiting a speech this morning by Ben Bernanke, the Fed chairman.
A survey of major lenders, released yesterday, showed a standard 30-year fixed-rate mortgage is currently being offered at an average interest rate of 6.66 per cent. That compares to 6.58 per cent a year ago, according to the analysis by Bankrate, a personal finance website. Over the same period, the Fed has slashed its key interest rate from 5.25 per cent to 2 per cent, and Treasury yields have fallen.
Bankrate said: "Investor skittishness about continued delinquencies and defaults has resulted in higher risk premiums, with additional fees layered on by Fannie Mae and Freddie Mac also increasing costs to borrowers."
Fannie Mae and Freddie Mac own or guarantee almost half of the outstanding mortgages in the US, and their role has become even more important in keeping the flow of mortgage finance available to lenders since Wall Street banks withdrew from much of the market last year. After halving in four days, Fannie Mae's shares rebounded 10.2 per cent yesterday, but Freddie Mac's fell a further 2.8 per cent.