{"id":4211,"date":"2023-05-30T23:38:46","date_gmt":"2023-05-30T23:38:46","guid":{"rendered":"https:\/\/frankbuysphilly.com\/leaders-struck-a-debt-ceiling-deal-what-does-it-mean-for-mortgages\/"},"modified":"2023-05-30T23:38:46","modified_gmt":"2023-05-30T23:38:46","slug":"leaders-struck-a-debt-ceiling-deal-what-does-it-mean-for-mortgages","status":"publish","type":"post","link":"https:\/\/frankbuysphilly.com\/leaders-struck-a-debt-ceiling-deal-what-does-it-mean-for-mortgages\/","title":{"rendered":"Leaders struck a debt ceiling deal. What does it mean for mortgages?\u00a0"},"content":{"rendered":"
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The debt ceiling deal struck by President Joe Biden<\/a> and House Speaker Kevin McCarthy on Saturday represents momentary relief for the mortgage market<\/a>, as it reduces the chances of a federal government default. But that’s just the first step in an ongoing effort to avoid the chaos.\u00a0<\/p>\n The deal has to receive Congressional approval before the U.S. Department of the Treasury<\/strong> <\/a>runs out of cash by Monday. And, if approved, it does not solve the high debt level problem, which means that other risks, such as a U.S. debt downgrade, are still on the horizon. <\/p>\n Regarding the mortgage market, on the one hand, the debt-ceiling agreement put an end to the recent mortgage rates’ upward trend to the highest level in two months. On the other hand, it resumes student debt payments, affecting potential homebuyers<\/a>. <\/p>\n According to Mortgage News Daily<\/strong><\/a>, the conventional loan 30-year fixed rate reached the 7.14% level on Friday amid the debt-ceiling drama. After the tentative deal announcement by the leaders on Tuesday, it went down to 7.02%. <\/p>\n “In the short term, we watched mortgage rates over the course of the past 10 days go up significantly, so a fair amount of damage has already been done,” Melissa Cohn, regional vice president of William Raveis Mortgage<\/strong>, said in an interview. <\/p>\n Cohn added: “And now it’s a question of whether or not the debt ceiling agreement that McCarthy and Biden came to this weekend can get voted upon. I wouldn’t say it’s a done deal. There are a lot of people that disagree about parts of it and are saying that they won’t vote for it. Every day that goes on, it’s a bad day.”<\/p>\n Analysts at Goldman Sachs<\/a><\/strong> also recognize the challenges related to Congressional approval. The House is slated to vote on the agreement on Wednesday and the Senate is scheduled for Friday, though procedural delays could push the vote into the weekend. <\/p>\n “Reaching a deal between leaders has been the highest hurdle and this agreement eliminates most of the uncertainty regarding the impending debt limit deadline, though the legislation must still pass the House and Senate,” Goldman Sachs analysts wrote in a report. “Regardless, the chances that Congress allows the June 5 deadline to pass without action now appear very low.”<\/p>\nWhat’s in the agreement?\u00a0<\/h2>\n