US Federal Reserve efforts to drive mortgage rates lower by buying home loans have faltered with rates rising over the past month.

The increase in rates is a disappointment to government officials who had hoped that a steep fall in house prices and low financing costs would lure new buyers into the nation’s depressed housing market.

The rate on standard longterm mortgages charged by lenders to prospective homeowners has risen from 5.04% on 13 January to reach 5.51% on Friday, according to HSH Associates, mortgage market analysts. The jump represents an almost 10% rise in borrowing costs.

The Fed has bought $92bn (£62bn) of mortgage securities since the start of the year under a plan that could see it purchase up to $500bn.

Financial Times, Los Angeles Times