Why the Housing Market Should Be Thanking Brexit
The Beatles, The Rolling Stones, Clapton, Led Zepplin — the mega bands of the British Invasion — and Brexit, all great reasons to crank back the sunroof, turn up the radio, and jam out going down the road this summer.
Wait, Brexit? Isn’t that the name given to the UK’s leaving of the European Union? Yes it is. So…why is it a reason to jam?
Brexit is one of major reasons mortgage rates are so low and why mortgage lenders and real estate professionals should have a “whole lotta love” for the summer of 2019.
The UK’s inability to figure a way out of the EU that doesn’t have them crawling across the floor asking the EU “do you want to hear me beg you to take me back?” has international investors starting to “drift away.” Investors with no where to go start screaming for US bonds like teenage girls in the Ed Sullivan Theatre when John, Paul, George, and (I guess) Ringo took the stage. Demand for bonds goes up, yields go down like a “lead ballon,” and mortgage rates start looking wonderful overnight.
Low rates and millennial demand have some analysts predicting home purchase lending in 2019 could reach $1.2 trillion. That is a chart-topping number not seen since 2005. It takes a “whole lotta” loans to do a “whole lotta” home sales to reach a number like that. So let’s just enjoy this summer.