On June 23, citizens of Britain voted 52 percent to 48 percent in favor of leaving the European Union. The results of the vote, known as Brexit, initially shocked financial markets, with the Dow plunging over 600 points. Since this initial financial slide, world markets remain volatile but the Dow has recovered its initial loss. Overall, the verdict is still out regarding how Brexit will ultimately impact the economy in the long run, but in the meantime, there have been some favorable results.
Mortgage rates are at near-historic lows because of Brexit, according to Money Magazine. The vote has created financial uncertainty, which has led to slower growth. Investors have reacted by using safer assets. This, along with the results of last month’s Fed meeting pointing toward a slower pace for rate hikes, has been very good for mortgage rates. In fact, the Mortgage Bankers Association said its seasonally adjusted index of refinancing applications reached 20.8 percent in the week ended July 1, the highest level since January 2015.
“Lower rates produce lower monthly payments and greater buying power. Those who are well qualified can afford a home that is 8 percent more expensive than at the beginning of the year,” said Jonathan Smoke, Realtor.com’s chief economist. “That’s more than enough to offset the rise in prices during that time.”
It is hard to say how long rates will stay down, but with dramatic stock market fluctuations, investors will continue to put their money in “stable” bonds, which will help keep rates down.
So with rates at near-historic lows, why wait any longer? If you have been thinking about buying or refinancing, now is a great time. For more information about rates and what would be best for your unique financial situation, contact us today to discuss your home-financing needs.
For more information on Brexit please check out this excellent Forbes.com article.
Thank you again for being a valued client. I am grateful to know you and am honored by your trust!