The Real impact of Brexit on the US Real Estate Market
Read about how Brexit impacts
home buyers and sellers in the US

The surprise victory in Britain of the campaign to leave the European Union aka Brexit has left U.S. home buyers with a very definable windfall: Mortgage
rates are now the lowest they’ve been in more than three years.
The
uncertainty in EU financial markets have resulted in a shift in demand
for US treasury Bonds, which in turn has caused Treasury yields to fall
and mortgages rates to tumble as a result.
Lower rates mean greater purchasing power and those who are well
qualified can afford a home that is more expensive than at the beginning
of the year. In some areas of Silicon Valley, it may almost be enough
to offset the rise in home prices over the past few months.
Brexit, however, is not likely to be a boon to
all parts of the residential real estate market as the stronger dollar
will dilute buying power for many international buyers (particularly the
Brits with funds in GBP), which will have a direct impact on West and
East Coast real estate markets, including Silicon Valley.
Low mortgage rates were already driving a strong real estate market this
year with lots of ready, willing and able buyers, from first-time and
move-up buyers, individual investors to retirement buyers.
Those low rates have a downside, though. They motivate lenders to be
tougher on credit restrictions. Lenders have become more risk-averse as
their profit margins have been severely reduced due to the double whammy
of lower rates and higher origination and servicing costs. As always,
act smart and do not hesitate to negotiate the conditions of your loan
based on what is offered to you by competition.
The other good news is that recent trends suggest that homes prices have
reached a plateau. It is not uncommon to see price decreases for
properties on the market for more than 30 days in Santa Clara County.
This trend may be accentuated as developers and builders and gearing up
to put new inventory on the market in the near future.
Brexit may be considered a catastrophe in
Europe, but here at home, it might just give the right boost to
stretched home buyers in a tough real estate market.
Source: edited from an article published in Realtor.com
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