Amid the steady drumbeat of bad news for the US housing market, there are hopes that a recent dramatic fall in mortgage rates could help struggling homeowners refinance into cheaper loans, offering the prospect of much needed stability.

But contrary to earlier periods when low mortgage rates prompted waves of refinancing activity, analysts say the silver lining could be tarnished by today’s stricter lending standards, virtually closed securitisation markets and still high rates for non-conventional mortgages. All this while the dark cloud of falling house prices casts a shadow over new buyers.