Congress has until August 2 to raise the ceiling on the national debt. If they don’t, expect wide-ranging and potentially disastrous effects on the housing market.

Two articles worth reading, as they spell out some of what will happen:

Mortgages dangle on debt doubts” (Bankrate.com)

There is no question mortgage rates will spike if the United States defaults on its debt, [general manager of Residential Mortgage of South Carolina Kevin] Breeland says, but rates might rise even before the deadline.

“If they are not close to a deal by the end of this week, we’ll start seeing the effect on rates early next week,” Breeland says.

And “Housing Analysts Jittery About Debt Default Scenario” (The M Report)

Not everyone agrees about the potential for a debt default, but economists and analysts across the board say the scenario would trigger sharp increases in one- and five-year Treasury yields, forcing mortgage rates to soar and break up a still-brittle housing recovery.

“Do I think the [U.S.] will default on [its] debt? No. But if they don’t start making substantial progress soon we should look for interest rates to start to moving higher,” a Bankrate article reports Bob Walters, chief economist for Quicken Loans, as saying. “And that could happen before Aug. 2.”