The country could start running out of money needed to pay its debts as early as June 1, although there is no official doomsday date.

Most economists and financial experts agree that the likelihood of a default in the US is slim to none. It has never happened before in the history of the United States and the results would be catastrophic.

"There are so many factors involved," says Danielle Hale, chief economist at Realtor.com®." It's very bad for the economy and it will spill over into the housing market."

The impact of a default cannot be underestimated.

If rising mortgage rates hit the housing market, a default would be akin to dropping a nuclear bomb on the housing market. Mortgage rates would almost certainly soar, popular government-backed loans could disappear, and government assistance for low-income renters could disappear. The pain will be shared by home buyers, home sellers, landlords and renters.

In a broader sense, a default would jeopardise the country's global financial reputation as the US would be unable to service its debt. Stock markets would likely fall. Government workers, contractors, social security beneficiaries and countless others could stop receiving the cheques they depend on. It could trigger an economic recession and unemployment would undoubtedly rise. And these are just a few examples of the many worst-case scenarios.

"If they do default, it will trigger chaos throughout the world markets and it will be worse than the 2007-08 crisis," said Robert Pratt, a professor of finance at East Carolina University in Greenville, N.C. "If they do default, it will trigger chaos throughout the world markets.

If the federal government defaults, it's unclear who gets paid and who doesn't. According to the White House, some 500,000 jobs could be lost. If the impasse between Democrats and Republicans is not resolved quickly, some 8.3 million people could lose their jobs as a result.

The longer the stalemate drags on, the more damage it could do to the economy and the housing market. Home prices could fall, sales could dry up and the housing shortage could worsen.

"I believe we will reach an agreement on a budget and the United States will not default," President Joe Biden said in a speech on Wednesday." If we don't pay our bills, it's ...... American economy and the American people would be catastrophic."

The consequences for the real estate market could be catastrophic.

Lawrence J. White, a professor of economics at New York University, said interest rates would jump, and mortgage rates could rise with them, possibly to 8 percent.

From there, it's a domino effect. Higher mortgage rates will take away opportunities for many potential buyers. This lack of competition could cause home prices to fall even more. Potential sellers who have locked in lower interest rates when they bought their homes or refinanced their mortgages may be more reluctant to list their homes. And the number of homes for sale could fall further, worsening the housing shortage.

Even if the impasse is short-lived, mortgage rates could remain high for longer than buyers and sellers feel comfortable with.

"We are in uncharted territory," says White.

Buyers who need mortgages are not just struggling financially. Pratt warns that government-backed mortgages, such as Federal Housing Administration and U.S. Department of Veterans Affairs loans, could suddenly become unavailable.

Without these low and no down payment loans, first-time homebuyers may find it more difficult to enter the market.

Meanwhile, housing vouchers and assistance offered to low-income renters may dissipate, at least temporarily. If landlords are not paid, tenants are at risk of being evicted.

While homeowners who rely on federal government income or Social Security payments may delay mortgage payments, they are unlikely to lose their homes to foreclosure. Foreclosures usually take several months, and the hypothetical political standoff is not expected to last.

But those who can't afford to pay their bills could see "lasting damage" to their credit scores, Hale said.

"It's really hard to see this for the housing market," she said.

The stock market fell as talks between the White House and Republicans broke down on Friday.

"Sometimes the chicken game goes wrong and you go over the cliff," White said." That always worries me."