Last Tuesday the United States debt ceiling was raised. President Barack Obama signed the Budget Control Act of 2011 into law. This increased our debt limit to $400 billion immediately.
Then on Friday Standard & Poor’s downgraded our credit rating from AAA (prime) to AA+ (high credit). Subsequently, the stock market took a nosedive and the price of gold continues climbing up. How is this all related to my home buying blog you ask?
We haven’t yet been approved for our mortgage. With the economy in a state of crisis and our country in massive debt, how willing are banks to approve mortgages right now? At some point you need to stop loaning out money to recover your losses.
Here is my personal silver lining: interest rates have been dropping pretty quickly the last few weeks. The lower our interest the more we can afford. Most reports indicate the interest rates will go back up again very soon. According to CNN Money and bankrate.com, a 30 yr. fixed is at 4.33% and a 15 year fixed is at 3.50%, if you lock in today. Per Historical Mortgage Interest Rates, these are the lowest rates we have seen in 30 years.
We are not entirely certain what will come of this. Credit card rates will probably go up, home mortgage rates will probably go up and we might be dipping into a second recession. With such a bleak outlook I am interested to hear about how we, as a country, can rectify where we went so wrong. Dennis Kucinich writes an interesting article on the “massive transfer of wealth from the American people to the hands of a few” and describes its ramifications for us all.