The ripple effect is just starting: some key players in the U.S. financial system -- including mortgage finance companies Fannie Mae and Freddie Mac who were downgraded by Standard & Poor's Monday. That could lift borrowing costs, making mortgages more expensive for consumers.
Mark Irwin doesn't have to buy a home. He took that plunge four years ago. The father of three young daughters is convinced now is the best time to invest some retirement savings in property, before interest rates change.
"They're going to shoot up again awfully fast. so now's the time to start investing in real estate if you have the means to do it," said Mark Irwin.
Days after S&P caused a firestorm by clipping the government's credit rating, there is a growing concern that interest rates will rise for anyone borrowing money -- from credit cards to mortgages. Irwin, a hospital nursing manager, blames the mess on Washington.
"They really need to stop playing politics and get down to the business of balancing the budget."
Irwin's not waiting around for that. He's ready to write a check. But with housing sales barely moving nationwide, the market's holding its breath for what's to come.
"People will still move forward and purchase if they are comfortable and confident with what they are purchasing, and I think that others that aren't quite there yet or on the fence might have this as an excuse to stay on the fence," said real estate agent Julissa Valdez.
Keeping Irwin off the fence, breathtakingly low mortgage rates -- just over 4-percent on a 30-year fixed. "What I hope is that the United States the leaders will come out of this looking saying we don't have our, pardon my French, crap together and hopefully we eventually be able to achieve that triple A rating again."
This view is stunning. The housing outlook? Not quite as clear.
Experts are predicting interest rates to climb half a percent in the next six months. Many economists say the real danger from the downgrade isn't higher interest rates. It's the hit to the nation's fragile economic psyche, shaking the confidence of consumers and businesses at a dangerous time.
