You've heard it on the news, something is going on with the European economy and the whole world is up in arms about it. They keep mentioning "Brexit"... but what does that mean exactly?
In Case You Missed It (ICYMI): Brexit is an abbreviation for "British Exit", which refers to the June 23, 2016 referendum by British voters as they voted 52 percent to 48 percent in favor of leaving the European Union. The referendum has affected global markets and currencies, causing the British Pound to fall to its lowest against the US Dollar in decades.
Brexit's effects expand beyond the strengthening of the US currency against the pound and go as far as impacting the US real estate market. So, what does Brexit mean for you?
The immediate impact of Brexit showed the 10-year treasury plummet and mortgage rates followed suit.
BUYERS: Mortgage rates are currently at all-time lows! Your monthly payments will contribute the highest percentage to paying your principal that we’ve seen in years.
SELLERS: Low mortgage rates continue to increase the pool of eligible buyers and there is speculation that Brexit will lead to higher home values since the combo of low mortgage rates and higher list prices will still be affordable for buyers.
Although rates will likely go up by the end of the year, Brexit is expected to bring a higher influx of foreign investors looking to purchase in the more stable real estate market of the Silicon Valley.
BUYERS: Competition with investors may rise, so it’s best to get in and purchase soon, especially while you can still grasp the low mortgage rates.
SELLERS: Homes available in the low inventory will continue to be met with increased buyer demand from both local and foreign buyers. Competition will begin to step up, if you're thinking about selling this year, now is the time to start getting your home ready to hit the market.
With the economic environment rapidly changing around this event, there is still a lot of uncertainty around what long term effects Brexit will have on the US economy and real estate market. Thinking about buying or selling? Don’t wait to start thinking about how this may impact your home search or your home’s value.
And now for a little fun!