Govt default would send mortgage rates above 8%
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Govt default would send mortgage rates above 8%
What would happen to Boston condo mortgage rates if the govt. defaults on its debt obligations? A government debt default could send Boston condo mortgage rates to highs not seen in over 20 years, a new Zillow analysis suggests.
The unprecedented scenario would send mortgage rates as high as 8.4% in September and the typical cost of a mortgage up 22%, the real estate platform’s analysis found. The Treasury Department has suggested the U.S. would fail to meet its debt obligations as soon as June 1, a situation which would significantly disrupt the housing market.
Mortgage rates could soar past 8% in the unlikely government default scenario, said Melissa Cohn, a regional vice president at William Raveis Mortgage, in an email to National Mortgage News. The rate for average 30-year fixed loans has hovered above 6% in the past six months, after momentarily rising above 7% last fall. The average hasn’t surpassed 8% since August 2000, according to data from the Federal Reserve.
