US mortgage giants were placed on credit watch. Here’s what that means for home buyers

US mortgage giants were placed on credit watch. Here’s what that means for home buyers

In this aerial view, homes sit on lots in a neighborhood on April 20 in Cutler Bay, Florida. The credit ratings of US mortgage giants Freddie Mac and Fannie Mae were put on watch for possible downgrade by Fitch Ratings on May 25.

Washington, DC (CNN) — The credit ratings of US mortgage giants Freddie Mac and Fannie Mae were put on watch for possible downgrade by Fitch Ratings late Thursday. A downgrade is not expected to happen, as a deal to resolve the debt ceiling standoff continues to be worked out in Washington, but even the warning is having an impact on mortgage rates.

The warning came because the ratings for Fannie Mae and Freddie Mac are linked to the sovereign rating of the United States. The watch is a result of the ratings agency warning on Wednesday that America’s credit rating could be downgraded if the debt limit showdown was not resolved soon.

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