The New York Times reports that, despite the US government’s move to bolster the banking industry, home loan rates rose again last week, reflecting concern that the Treasury will borrow heavily to finance the rescue.

The average rate for 30-year fixed rate mortgages in the US rose 0.69 percent last week.

This month, Fannie and Freddie cancelled a fee increase that would have applied to markets where home prices are falling, but the companies still have many other fees in place. Economists say that prices in those places will probably fall further.

Those higher fees are generally invisible to borrowers because banks factor them into mortgage interest rates. Higher interest rates result in bigger monthly payments, pricing some potential buyers out of the market. For example, monthly payments are $2,700 on a 6 percent 30-year, fixed-rate loan of $450,000. If the interest rate rises to 7 percent, those monthly payments jump to $3,000. All things being equal, when rates rise prices generally fall.

In some places, price declines are being driven by a sharp increase in sales of foreclosed homes.

Single-family home prices in Las Vegas have already fallen 34 percent from their peak in the summer of 2006, according to the Standard & Poor's Case-Shiller home price index. Prices in San Diego have fallen 31 percent since late 2005.

Two homes in Fort Lauderdale that sold for about $730,000 apiece in 2005 recently sold for $400,000 - a 44 percent decline.