BREXIT x 2

A friend of mine remarked this week, "Only England could manage to exit Europe twice in one week!!" He was referring not only to Britain’s vote to leave the European Union, but also to England’s disgraceful exit from the soccer European Cup competition at the hands of Iceland, a nation that doesn’t even have a formal national soccer team… It was a shocking week for the English, all things considered.

Whilst I am happy that I am going to get a great rate on my dollars when we head to England this month, I am truly unsettled by the Brexit result. I grew up as a thoroughly “European” teenager; I speak three languages, and I lived, worked, studied and traveled all over western Europe for the better part of a decade. So for me, it has been a huge punch in the gut to watch Britain sever its ties to the continent so abruptly. The nation, and indeed, Europe as a whole, has been launched into a massive sea of uncertainty, and I am not confident that anyone knows how to navigate these uncharted waters. However, what took place is an example of democracy in its purist form, and once the seas have calmed, it perhaps gives the UK a chance to re-shape itself for the future and build a more solid platform for mutually beneficial trade and relationships. I do hope so.

So, how does Brexit impact us here in the US? It’s quite a loaded question.

In general, mortgage lenders were upbeat. The turmoil in the markets in the immediate aftermath of the Brexit result had a beneficial impact on lenders and borrowers because there was a flood of activity on the 10-year Treasure note, the benchmark for mortgage interest rates, pushing rates down.

According to Lawrence Yun, Chief Economist of the National Association of Realtors, “Demand for US real estate could rise.“

The long-term impact of Britain’s exit from the European Union is largely unknown, but in the short-term, US real estate could benefit from overseas investors fleeing to more solid ground over here. Mortgage rates, already at a 3 year low, will likely fall and homeowners should lock in at these rates, which are predicted to remain flat at least until after the presidential elections here in the US. So we may see an uptick in mortgage and re-financing activity in the next couple of months. However, whilst the real estate market may see some benefit, over time the weakened pound will hurt US exports and therefore impact jobs, income and consumer confidence.

I think that I can safely predict that we will see considerably fewer Brits buying vacation homes here in Florida for the foreseeable future…