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VIRGINIA, USA — As the federal government approaches the debt ceiling, concerns are growing about what happens if leaders fail to reach a budget agreement in time to avoid default.
House Speaker Kevin McCarthy said after a negotiation session Tuesday that he and President Biden are still far apart, but he thinks they could reach a deal by the end of the week.
Virginia Senator Mark Warner is among those warning of the dire consequences of failing to come to an agreement. In a tweet, he claimed that housing costs would rise 22% if the U.S. does not raise the debt ceiling.
A debt default would wreak havoc on nearly every sector of our economy. Housing costs would rise an average of 22%, and retirement accounts, car loans, credit card debt and more would all be impacted too. We cannot risk it.
— Mark Warner (@MarkWarner) May 12, 2023
THE QUESTION
Where did Sen. Warner get that 22% number?
THE SOURCES
WHAT WE FOUND
A spokesperson from Sen. Warner’s office told WUSA9 he got the number from a report released by Zillow, the real estate website.
The report projected how high-interest rates could rise if the U.S. defaults and where that would send the rate for a 30-year mortgage. It also estimated how much home sales would fall and the impact on property values.
The experts at Zillow concluded that someone getting a mortgage in September would pay 22% more for that mortgage if the U.S. defaults on its debt than if Congress and the White House reach a deal.
The report’s authors added, “The exact contours of a debt default scenario this summer are unclear, but also unimportant for the conclusion about its impact on the housing market.”
English (US) ·