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 Independent