Debt and Deficits Make Homes Even More Unaffordable

As federal debt spirals, higher interest rates and inflation could make affordability even worse.

The Big Picture

America’s national debt is skyrocketing, and the consequences are showing up in higher mortgage rates, growing deficits, and a looming fiscal crisis. Congress continues its reckless spending habits, ignoring the mounting costs of debt service and the long-term economic risks.

Despite recent Federal Reserve rate cuts, mortgage rates remain high, driven by investor concerns about deficits and inflationary policies. If Congress refuses to rein in spending, Americans will continue to feel the effects at the gas pump, the grocery store, and when trying to buy a home.

Zooming In

Congress Continues Its Fiscal Irresponsibility

Most Democrats and Republicans are in denial about America’s financial trajectory:

• The federal deficit in FY 2025 is already $622 billion, $242 billion higher than this time last year.
• Federal tax receipts are down 7%, while spending is up 18%.
• Net interest payments on the debt are projected to surpass $1 trillion—more than what’s spent on Medicare or the military.

Congress refuses to address the structural drivers of debt, like unchecked entitlement spending and wasteful federal programs. Without reform, the debt burden will continue to crush economic opportunity for future generations.

The Rising Cost of Borrowing

Federal debt isn’t just an abstract number—it directly impacts mortgage rates and borrowing costs:

• 30-year fixed mortgage rates hit 7% in November, up from 6.26% in October.
• Mortgage rates remain high despite Federal Reserve rate cuts, as investors demand higher yields to compensate for growing U.S. debt risk.
• The yield on a 10-year Treasury is 4.37%, nearing its highest level since 2007.

Higher yields on government debt make borrowing more expensive for businesses and consumers, slowing economic growth and keeping homeownership out of reach for many Americans.

America’s Growing Debt Burden

The share of the U.S. budget financed by debt is approaching 28%—and will keep rising:

• The U.S. is projected to borrow nearly $2 trillion in FY 2025 just to cover its deficit.
• Net interest payments on debt now exceed $1 trillion, surpassing Medicare spending.
• Congress continues adding new spending and tax cuts, worsening the deficit with no plan for long-term fiscal sustainability.

This unsustainable borrowing cycle risks long-term economic instability, increasing the likelihood of future financial crises and higher inflation.

Data Snapshot

• $622 billion deficit in FY 2025 so far, $242 billion higher than FY 2024.
• Net interest payments on debt now exceed $1 trillion, surpassing Medicare spending.
• 30-year mortgage rates remain above 6.7%, despite Federal Reserve rate cuts.
• U.S. Treasury yields are at their highest levels since 2007, making borrowing more expensive.
• Projected debt will exceed $50 trillion by 2034, with nearly 30% of government spending financed by borrowing.

Independent Lens

Independent voters prioritize affordability and responsible fiscal policy—but Washington refuses to act. Without serious spending reforms, America will continue down an unsustainable path of debt, high interest rates, and economic stagnation.

Congress must stop the cycle of deficit spending before it’s too late. If leaders won’t act, voters must demand accountability in the next election.

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