Is the debt ceiling and the drop of America’s AAA credit rating affecting the real estate industry? Sadly to say, the answer is: “Yes!”
We are at risk of having mortgage interest rates raised across the US, which would cause a downward push of housing prices across the country, although it is too soon to see how extensively the industry will be hit. In addition to the $1.2 trillion cut that the government must meet by December, the Bush Tax Cut are set to expire December 31st.
What does that mean? Everyone’s federal income and investment tax rates will go up to where they were in 2001. This is not a positive outlook for a weakend economy.