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SUMMARY:

President Barack Obama signed legislation Tuesday to raise the U.S. debt ceiling, avoiding a potential government default only hours before the deadline. 

“It is an important first step to insuring that, as a nation, we live within our means,” Obama said.

The new law immediately allowed the Treasury to borrow an additional $400 billion, with more borrowing allowed later.  It is also intended to reduce the nation’s $14.3 trillion deficit by at least $2.1 trillion over 10 years.  The House of Representatives passed the bill on Monday by a vote of 269 to 161, after weeks of intense debate.

Failing to raise the federal debt ceiling, which is the maximum amount that the federal government can borrow without additional congressional action, would cause interest rates to climb, perhaps sharply, and they would remain higher than they otherwise would. Mortgage rates, among other interest rates, would rise alongside interest rates on U.S. Treasury bonds, making homes less affordable and depressing house sales and prices.

The last time the 10-year Treasury yield — a key benchmark for mortgage rates — fell this far was in the fall of 2010, when it dropped to 2.5%. Yields plummeted to around 2% at the end of 2008.

So for the time being rates are once again at all-time lows, so if you are a real estate agent it’s time to call your buyers and if you haven’t taken advantage of the refinance market call me today…ESPECIALLY IF YOU HAVE A LOAN BETWEEN $625,500 AND $729,750- WE HAVE UNTIL SEPTEMBER 30^TH TO FUND THOSE.

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