Here’s the latest information on the housing market from Mortgage Market Guide:
“New Home Sales rose by nearly 8% in August from July to an annual rate of 421,000 units, despite the recent rise in home loan rates.”
The big news this week:
Congress has yet to make an agreement to raise the debt ceiling in order to pay our Federal debt obligations.
Basically, this means that we have a legal limit on how much debt we are willing to take on. And lawmakers have a few choices to make:
1. Raise the debt ceiling.
2. Scale back and/or close government departments.
3. Default on our debts.
Like many families, these are hard decisions to make.
This has affected the markets, and investors have a “wait and see” attitude.
This week, interest rates continued to ease/go down due to the uncertainty. A relief after all the rate increases we’ve seen in the last few months.
Tuesday, if there is no agreement to raise the debt ceiling, there will be immediate cuts to various government departments. The best guess is that we have funds to pay our Federal debts and bills until October 17th.
After that, there will be decisions about scaling back federal employee hour’s, furlough’s, cutting unnecessary services and more.
How will this effect mortgages? Mostly FHA and VA are affected, which will slow down the rate of insuring the loans. Mostly, lenders will feel this on the back end of their loan system (not the front end where you and I exist). Again, as I said last week, we will probably see slightly lower rates.