The logos for Freddie Mac and Fannie Mae
The logos for Freddie Mac and Fannie Mae - 
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Kai Ryssdal: Keeping with our theme of newsworthy items getting swallowed up by the downgrade, the housing market hasn't gotten the headlines it probably would have otherwise. S&P cut its ratings for Fannie Mae and Freddie Mac yesterday. Not only that, the mortgage companies reported some pretty dismal second-quarter results too, losses in the billions of dollars and pleas for more government cash.

Marketplace's Stacey Vanek Smith has that story.

Stacey Vanek Smith: The housing market's a mess: demand is dead, prices are low, foreclosures keep coming. The one bright spot? Cheap mortgages.

Keith Gumbinger is with, which tracks the mortgage industry. He says the downgrade of Fannie and Freddie will change that.

Keith Gumbinger: Ultimately, the downgrade to the credit ratings of Fannie and Freddie will mean higher borrowing costs.

Those higher costs, plus worries about the economy, are a real threat to the housing market's recovery. Nicolas Retsinas is a real estate economist at Harvard.

Nicolas Retsinas: All the talk, all the reports of the downgrade is just going to further undermine consumer confidence; consumer confidence is going to make people less likely to enter that housing market.

Retsinas says lower demand for mortgage loans is bad news for Fannie Mae and Freddie Mac; they already lost billions of dollars last quarter and have asked the government for more money. If people take out fewer loans, that means even less revenue for Fannie and Freddie. But do we really care about Fannie and Freddie's state of health?

Dan Nigro: Yes we do.

Dan Nigro is a mortgage bond market analyst at Warfield Consultants. He says Fannie Mae and Freddie Mac generate about 90 percent of home loans. We need the housing market to recover, which means we need Fannie and Freddie to thrive.

Nigro: If we have future housing declines, it's going to impact consumers, their desire and willingness to spend for the future. That's why the housing market is important -- it's the largest single asset for most people.

Lawmakers were talking about unwinding Fannie and Freddie. Nigro says the downgrade means that's not likely to happen for a long time.

In New York, I'm Stacey Vanek Smith for Marketplace.

Follow Stacey Vanek Smith at @svaneksmith