The recent credit rating downgrade in the US, inflicted by Standard & Poor’s last week, is expected to have a negative impact on the US housing market over time according to some industry experts.

A number of Wall Street analysts are now predicting that interest rates across the board in the US will rise in the coming months, which will drive up the rates of consumer adjustable rate mortgage loans, credit cards, car loans and a host of other financial products.

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, and causing US home sales to remain in the doldrums.

If foreign countries start requesting just a 1% rate increase from the US on its government back bonds, it is estimated that will add an additional $1.4trn of interest to the US debt over the next 10 years, effectively wiping out the entire deficit savings made by Congress last week.

Standard & Poor’s warned last month that a downgrade of the US credit rating likely would trigger a downgrade of mortgage-finance giants Fannie Mae and Freddie Mac. The firms were effectively nationalised three years ago, and they’ve managed to so far maintain their triple-A rating only because the government has effectively guaranteed their debt, this has so far allowed Fannie and Freddie, which own around $1.5trn in mortgages on their balance sheets, to borrow money cheaply.