Brexit, the shocking decision by the United Kingdom to sever their economic and political union with Europe, has sent shock waves throughout the world. Obviously, people are asking what effect it will have on the US housing market.
The first thing that happened was a fall in mortgage interest rates. The average rate of a 30-year fixed mortgage dropped to 3.48%—the lowest level since May 2013, according to Freddie Mac.
But there are several schools of thought on how Brexit and the ensuing market uncertainty will effect sales prices.
According to CNN Money, some experts expect the fallout from the vote to be a boon for the U.S. real estate market as more foreign buyers seek out a safe haven to park their cash.
But on the flip side, Forbes.com warns that luxury sellers in particular may feel pain. Foreign buyers consider U.S. real estate a safe investment and have been parking cash in Miami, New York and other cities. Some of them probably are shopping for high-end condos right now, but with stock markets losing value, there’s less wealth to go around.
So in a nutshell, it’s too soon to know the full impact. Lower interest rates are an obvious plus, and as Forbes also pointed out, home buying is personal. If you have the desire, money and maturity to buy a house, don’t let Brexit stop you.
18 new listings this week, 17 condos and 1 single-family home.
6 new listings. The average price is $406,833 and the average price per sq/ft is $614.
6 properties closed. The average price was $492,419 and the average price per sq/ft was $668.
10 new Listings. The average price is $969,099 and the average price per sq/ft is $760.
22 properties closed. The average price was $707,045 and the average price per sq/ft was $631.
1 new listing. Listing price is $1,940,000 and the price per sq/ft is $1,076.
No closings this week.
1 new single-family home listed; a 2-bedroom homes for $1,450,000.
One 4–bedroom home closed. The sales price was $1,785,000.
(Information provided by Hudson County MLS)
Mortgage Market in Review
The surprise victory of the referendum for the U.K. leaving the European Union (a.k.a. “Brexit”) really threw the Market for a loop, as analysts had been expecting the U.K to stay in the European Union. As the equities’ markets went into a tailspin, all eyes went to the gold and bond markets, as investors looked to make their flight to safety.
What has been the immediate impact on mortgage rates? The trend of rates is down, but they haven’t bottomed out yet. The huge market movement we saw on Friday always results in widely varied pricing strategies among lenders. With that being said, it’s too soon to tell how much of the market activity from Friday will carry into the week ahead. If the equities’ markets continue to drastically sell-off, we’ll see a continued rally in the bond markets, and inevitably mortgage backed securities will have to follow. So, we are in a wait-and-see approach for now, but we won’t have to wait too long to get an answer on mortgage rates.
CLICK HERE for a more detailed analysis from local mortgage broker Michael Mundy…
ALSO OF INTEREST:
Ann Wycherley is an award-winning realtor with over 15 years of solid real estate experience in the Hoboken market.
She has been recognized by the New Jersey Realtors Circle of Excellence for many years, having earned the Gold Level of Excellence for 2015 and awarded Lifetime Membership in the New Jersey Association of Realtors Distinguished Sales Club.
Other accolades include the coveted Centurion Award for the past four years running (2012-2015), which represents the premium level of achievement within the Century 21 organization.