Rising government bond yields are pushing mortgage rates toward 8%, which is bad news for homeowners and anyone hoping to sell.

• The 10-year government bond yield is near its highest level since 2002, and mortgage rates could hit 9% by early next year.
• Lenders want more interest because US debt keeps growing and they fear either default or inflation eating their returns.
• Interest payments alone eat half the yearly budget shortfall, and neither party will cut spending.
• At 9% mortgage rates, buyers can afford only half the house they could at 3%, so home prices have to fall hard.
• Gold and silver dipped on the yield news, but higher deficits and money printing point the other way for metals.

Outlook: Expect mortgage rates to keep climbing, home prices and home equity to come under heavy pressure, and gold to benefit as confidence in government debt erodes.