KEY POINTS:
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 efforts to kickstart 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.
The problem is dominating discussion as Federal Reserve governors meet to chew over the credit crisis at Jackson Hole, Wyoming.
A survey of major lenders showed a standard 30-year fixed-rate mortgage is being offered at an average of 6.66 per cent. That compares with 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 increasing costs to borrowers."
- INDEPENDENT
