Brexit and U.S. Real Estate

It’s probably safe to say that the Brexit vote, resulting in the UK choosing to leave the European Union, is still sending ripples (if not shockwaves) through member states and other nations who’ve been following the news with a wary eye toward their economies.

Right now, there’s plenty of speculation to go around. That, as much as anything, has resulted in uncertainty and an immediate impact on the UK’s economy. Not to be overlooked is the concern about the real estate market. With the current US real estate market already sizzling, as house prices continue to soar and demand for houses continues to outpace available resources, you had to know that we here at The Young Home Team are keeping up with the latest.

The bad news is, it doesn’t sound like there are great expectations for the short term future of real estate within the UK. Shaken, people are uncertain about their financial futures. It’s well documented that uncertainty leads to less confidence in an enormous transaction like buying a home. That’s hardly surprising. Buying and selling just got riskier, because now the market is less predictable in the UK. That may pull the UK’s real estate market to a stall for a while.

On the other hand, those analysts are expecting a potentially positive shift for the US market. Investors that may not be comfortable putting money into the UK at the moment may opt for a more stable environment, which could reasonably be the US. Granted, the coming presidential elections can still have a bit of an impact as well.

In the meantime, we’re thinking you might see some silver lining and opportunity, at least in the short term, as a result of the disruption. For example, loans will likely get cheaper. Mortgage rates generally fall when Treasury rates fall, and Treasuries just took a dive as money flowed out of the UK and elsewhere into the safe bet of US markets. Additionally, loan qualification isn’t expected to become more difficult— a relief, given the already strict standards burdening first time home buyers. It’s worth your time to take those two notes into consideration, when drawing up your “Am I Ready to Buy/Sell” checklist.

Until next time! – The Young Home Team

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