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ALAMEDA CA; August 5th at night, Standard & Poor’s rating agency lowered the long-term rating of the U.S. government and federal agencies from AAA to AA+, for the first time in U.S. history.

Standard & Poor’s (S&P) is a United States–based financial-services company. It is a division of the McGraw-Hill Companies that publish financial research and analysis on stocks and bonds.

S&P stated the primary reasons for their downgrading the credit of the U.S. sovereign debt were twofold: Rising Debt Burden and Negative Outlook.

S&P States

•The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

Now this is just another point to prove that while it may seem like we are living in this world of technology but we are closer to the great depression than you might think we just have internet, cell phones, and deodorant.

What does this mean to Real estate?

A number of Wall Street analysts are now predicting that interest rates across the board in the U.S. are assumed to rise in the coming months.

For future home buyers, fixed rate mortgages are now expected to go higher as well, thus making it even harder for millions of consumers to qualify for a new mortgage,

Some industry experts predict little impact…

Billionaire Warren Buffett said “Standard & Poor’s erred when it lowered the U.S. credit rating and reiterated his view that the economy will avoid a second recession. The U.S., which was cut Aug. 5 to AA+ from AAA at S&P, merits a ‘quadruple A’ rating.”

-World Property Channel