According to the National Association of Realtors (NAR), Great Britain’s decision to leave the European Union (EU), also known as “Brexit,” could have a short-term positive impact on U.S. housing. “Demand for U.S. real estate could rise,” said NAR chief economist Lawrence Yun, adding that global corporations may also show additional interest in commercial real estate if the U.K. becomes “a less attractive place to conduct global business” as a result of the move. Longer term, things could be a little less sunny because Brexit is likely to create additional global market volatility and make the EU less stable as well.
As if interest rates were not presently low enough, Brexit could also help out homebuyers hoping that interest rates will stay low for a while longer. “Mortgage rates will tumble,” said Greg McBride, Bankrate.com’s chief financial analysts. He added that interest rates could “possibly hit new record lows,” and other analysts chimed in, suggesting that this could give the home-refinance sector “new life” in the short term as well. Although McBride recommended homeowners move fast to lock in low rates, Fannie Mae chief economist Doug Duncan wasn’t worried about the low interest rates going anywhere. “The Fed will very likely be on hold for some time as it observes the impact on U.S. and global financial markets and economic activity,” he said.
Market shifts are not necessarily bad for markets as long as investors make sure to understand them before reacting.
Point to Ponder:
Do you think Brexit was a good move for Great Britain?
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Carole Ellis is the host of Real Estate Investing Today, a popular 9-minute daily podcast focused on educating real estate investors about the important topics that will make their investing SAFER, FASTER, and MORE PROFITABLE. She's also the editor of the Bryan Ellis Investing Letter. She has more than a decade's worth of experience in and reporting on the real estate industry and, additionally, has written dozens of courses on the topic. Carole lives in Kennesaw with her husband, Bryan, and four children. She believes wholeheartedly that your best investment is always your OWN education.