Here's How The Brexit Could Impact The U.S. Housing Market

Markets Benzinga

While most Americans dont particularly care whether or not Britain is part of Europe, they do care about the U.S. housing market and mortgage rates.

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If you are wondering if the Brexit vote could impact either, it already has. Uncertainty surrounding the Brexit vote was likely one of the main drivers behind the Federal Reserves decision not to raise U.S. interest rates in June.

But theres another way that the Brexit vote could indirectly boost the U.S. housing market.

[The] isolationist move will cause many wealthy foreigners to consider selling their properties in [the] UK, especially in London as it becomes [a] less attractive place to set up offices to conduct global business, National Association of Realtors chief economist Lawrence Yun says. Therefore, demand for U.S. real estate could rise if global investors view America as open to global business.

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Analysts also expect money to flow out of the U.K. bond market and into U.S. Treasuries.

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Many homeowners miss out on savings when interest rates dip because they think its too complicated to refinance," said Regis Hadiaris, Rocket Mortgage Product Lead. "By using Rocket Mortgage, they have a fast and simple way to take advantage of the opportunity created today by Brexit, and lock a low interest rate before it climbs again.

Wells Fargo is predicting that 2-year and 10-year Treasury yields will reach 0.5 percent and 1.3 percent, respectively within two weeks of the Brexit vote.

The iShares Barclays 20+ Yr Treas.Bond (ETF) (TLT) is one of the few bright spots in Fridays brutal market, up 2.7 percent in mid-day trading.

Disclosure: the author holds no position in the stocks mentioned.

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