While You Were Distracted, America Went Bankrupt

It’s Spring Break for the King family this week! For the first time in a while, we’re keeping things local with a little “staycation"...and honestly, no complaints here! Looking forward to catching up on chores, tackling the never-ending laundry, and finally getting started on taxes (not exactly fun, but it has to be done!).

The market, on the other hand, has been anything but relaxing. The past 30 days have been unpredictable, to say the least, and like many of you, we’re hoping to see a bit more stability ahead. Fingers crossed!

In the meantime, we’re here to break down everything you need to know for the week ahead! Let's goooo!

We are posting regular content to Instagram (Nick | Kreg) and Facebook (Nick | Kreg) to help you and your buyers stay informed. Be sure to follow us!

Read time: ~5 minutes

Rates ended HIGHER compared to last week, and volatility was HIGH. Rates are in the mid 6% range for most loan types without paying discount points. Paying discount points can get you in the low 6's.

While You Were Distracted, America Went Bankrupt

I find it fascinating how the media can spend 24/7 stirring up political division to boost ratings, but when real financial news drops that threatens every American's future, suddenly there's complete silence 🤔 The Treasury Department's 2025 financial statements were released last week and it paints a scary reality: the U.S. government is technically bankrupt.

The numbers are completely staggering:

• Total Assets: $6.06 trillion

• Total Liabilities: $47.78 trillion

• Net Worth: -$41.72 trillion

That's right, America owes nearly 8 times more than it owns!

To put this in perspective, imagine if your family finances looked like this:

Your Annual Income: $70,000

• What you own: $8,500 (think: a paid-off 2010 Honda with 150,000 miles)

• What you owe: $67,000 (credit cards, personal loans, etc.)

• Your net worth: -$58,500

If these were your personal finances, it would be nearly impossible to get a loan, creditors would be calling daily, and every financial advisor would be screaming "bankruptcy" unless you made immediate changes. You'd be forced to slash spending or dramatically increase income just to survive.

Yet when the federal government presents this exact same financial profile on a massive scale, the reaction from politicians and media is deafening silence. Legit, the only reason I stumbled across this information is because I pay for a stupid online subscription to Fortune to get digital access to their "premier" articles. This report was completely buried by mainstream media and everyone pretends it's business as usual.

The real question every American should be asking isn't whether this is sustainable (it clearly isn't), but rather how long this house of cards can remain standing before economic reality comes crashing down.

Why Government Insolvency Matters to 🫵!

Ok, ok...We've all heard the government has a massive debt problem. But HOW is this going to impact us in the housing market in the short-term and long-term? We are going to do our best to paint a realistic picture for y'all...

Short-Term Housing Impact (6-18 months)

The short-term housing impact may not look dramatically different from what we've grown used to. The constant ups and downs in the housing market as interest rates fluctuate violently are already familiar to us. Globally, the perception is that the U.S. is still the "least dirty shirt in the hamper" when it comes to financial stability, so foreign investors and buyers aren't likely to completely lose confidence in the near term.  

However, this relative stability won't last forever. If the government's insolvency becomes even more widely recognized, we could see a dramatic spike in interest rates. This could happen through the Federal Reserve's efforts to combat rising inflation, or because investors demand higher returns for lending to an effectively bankrupt nation. Those skyrocketing mortgage rates would immediately cool buyer demand, leading to declining home prices and increased inventory on the market.

Long-Term Housing Market Impact (2-10 years)

The long-term outlook really comes down to how the government responds. If they implement harsh spending cuts to try to rein in the debt, we could be looking at a prolonged housing slump, similar to the 2008 crisis, with foreclosures and high unemployment weighing on the market.

But let's be real...spending cuts are the least likely path for either political party. Instead, the government will probably just try to "print its way out" of this mess, as they so often do. In that scenario, we could see a hyperinflationary environment where housing becomes one of the only reliable stores of value. This could create extreme volatility, with home prices soaring but becoming increasingly unaffordable for average Americans. The rental market would likely explode as homeownership becomes out of reach for many.

I know this all sounds dire, but the reality is the government has shown no willingness to genuinely address its debt problem. That's why it's so crucial to prioritize homeownership NOW, while you still can. Nick and I are putting our money where our mouth is....we're actively purchasing a home and building out four rental properties, because we see real estate as the best hedge against the inflation that's inevitably coming. Don't let yourself and your clients be left behind!

Big Week Ahead for Mortgage Rates!

All Nick and I want is a little stability, but unfortunately, that's not in the cards this week. There are a few key events on the schedule that are sure to send mortgage rates on another wild ride...

Monday: Fed Chair Powell Speaks - The market tends to hang on every word out of Powell's mouth. Pray that he mentions confidence in controlling inflation and concern about the labor market. Any indication reflecting the need to potentially cut in the future will help rates. Anything to the contrary, will push rates higher.

Tuesday: March Consumer Confidence Data - If confidence drops, we could see mortgage rates improve slightly. However, if it’s strong, rates could tick up. Either way, inflation is still the bigger driver right now, so expect small swings rather than a major change.

Wednesday: March ADP Employment Data - A weak print (which we are expecting) could bring some relief to mortgage rates. Would be shocked to see a strong employment number here.

Friday: March Jobs Report - The all-important Jobs Report comes out at the end of the week. Last month we saw a huge miss on job creation. If we see another negative number, it could push mortgage rates lower.

But even if the economic data points towards a slowing economy and lower rates, the ongoing conflict in Iran could completely overshadow everything. If the war continues to escalate, that could send mortgage rates soaring higher regardless.

Needless to say, it's going to be a bumpy ride this week. Buckle up!

Instagram Reels of the Week

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Don’t hesitate to reach out if you need anything at all. Have a wonderful week!