Just over a month ago, the United Kingdom decided to withdraw from the European Union in a decision commonly known as Brexit. At that time there was a lot of speculation on how that decision would impact the U.S. residential mortgage market. Today, we want to look at the impact of the first 30 days.
Most believed that the Brexit decision would drive mortgage rates down and keep them down for some time. As CoreLogicreported:
“First-time buyers can count on continued low mortgage rates to help with affordability issues. Similarly, re-setting adjustable rate loans will have less of a rate shock, and in some cases may even go down.”
What has actually happened?
Initially, rates did fall. However,Freddie Machas reported that rates have stabilized and have actually increased marginally each of the last two weeks. This promptedFreddie MacChief EconomistSean Beckett tosay:
“Post-Brexit volatility tapered off over the last two weeks, allowing interest rates to bounce back a bit from their near-record 30-year mortgage rate lows.”
And,Capital EconomicsProperty EconomistMatthew Pointonbelievesrates will continue to increase:
“Given we expect Brexit will have a minimal impact on the U.S. economy, we see no reason to change our forecast for mortgage rates to reach 3.85% by the end of this year, and 5.0% by the middle of 2018.”
For now, it appears that the impact of Brexit on the U.S. housing market was not as dramatic as some thought it could be.
Author:Derrick Houston Phone: 214-385-1221 Dated: July 25th 2016 Views: 196 About Derrick: Derrick has been in real estate for seven years. Before embarking on a career in real estate, Derric...
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