How will Brexit affect the U.S. housing market?

While it’s true most Americans don’t particularly care whether or not Britain is part of European Union, we do care about the U.S. housing market and mortgage rates.

If you’re wondering if the Brexit vote would impact either, it has already started to affect us.  Uncertainty surrounding the Brexit vote was likely one of the biggest reasons behind the Federal Reserves decision not to raise U.S. interest rates in June.

Loans are about to get cheaper. Typically, mortgage rates fall when Treasury rates fall, and Treasuries just took a dive as money poured out of the U.K. and elsewhere into the safer bet of U.S. markets. It’s speculated the move will cause many wealthy foreigners to start selling their properties in the UK, especially in London as it becomes a less attractive place to set up offices to conduct global business. Therefore, demand for U.S. real estate could rise if global investors view America as open to global business.

With the low inventory, this will likey cause home prices to continue to rise due to the lack of supply and the increase in demand. Couple this with historically low interest rates and you have a recipe for a hot market.

 

Keith

 

Brexit Could Make Your House Worth More

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