Even as a Fed rate cut is expected today, mortgage loan interest rates keep going up. Despite efforts to inject more liquidity by making money easier for banks to borrow, credit remains tight in the mortgage industry. Indeed, reports the San Francisco Chronicle, mortgage loan rates are higher than they should be:

The average rate on standard
conforming loans - first mortgages smaller than $417,000 eligible for
sale to Fannie Mae or Freddie Mac - is about one percentage point
higher than it should be relative to the yield on 10-year Treasury
notes, McBride says.

Your best bet is to amass a good-sized down payment and work on your credit score if you want to take advantage of the lower home prices right now.