As the U.S. debt ceiling limit deadline fast approaches, and political jockeying continues between Speaker of the House John Boehner and President Obama, there is strong growing concern for the U.S. housing market.
David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA) tells the World Property Channel, "The Mortgage Bankers Association is very concerned about the implications to the financial system of the United States if the U.S. defaults on its debt. The likely impact to the financial markets, interest rates, and to every family in America will be costly if the ceiling is not raised. We implore policymakers to act swiftly and find a workable solution, given the short time left, to take this step and not put the credit rating of the United States in jeopardy."
If the U.S. does lose its Triple A credit rating, the impact could be felt across the entire U.S. housing sector with rising interest rates, which would cause higher monthly mortgage payments, this stimulating further home loan defaults in an already fragile economy.
In addition, new credit would be harder to get for those home buyers looking for a mortgage, thus impeding future home purchases.