Recently, Britain voted to leave the European Union. This “Brexit” is affecting the world: economies and real estate included. According to realtor.com, one of Brexit’s effects on real estate is super low mortgage rates. Last week, they were the lowest of the year. This is very helpful to prospective homebuyers.
“Lower rates produce lower monthly payments and greater buying power—those who are well qualified can afford a home that’s 8% more expensive than at the beginning of the year. That’s more than enough to offset the rise in prices during that time.
And that’s why Brexit has just increased the opportunity to lock in a low associated mortgage rate for a new home. And maybe added a bit of urgency to the proceedings,” wrote Jonathan Smoke, chief economist at realtor.com.
Low mortgage rates earlier this year increased housing demand. They allowed many first time buyers to enter the market. However, supply of housing dwindled. Low rates also cause more credit restrictions. So, while low mortgage rates are one, there are many of Brexit’s effects on real estate.
“Those already winning in the real estate market are getting a bigger boost from Brexit. Sellers in the right locations and price points will continue to have the upper hand as investors and first-time buyers fight for limited inventory. Well-qualified buyers will be able to capitalize on historically low mortgage rates. And developers and builders should be able to take advantage of those lower rates to line up land and lots to fuel more inventory expansion down the road,” wrote Smoke on realtor.com
No matter the Brexit’s effects on real estate, the market in the United States is doing well. Now is a great time to buy your dream home in Miami, and our agents at RE/MAX Paradise can answer your questions about current real estate trends.