LIME REALTY GROUP, like many of you, has watched the news with interest since the citizens of the UK voted to leave the EU. That decision sent markets into freefall. Some figures haven’t been this low since 2011. Of course this is mostly because investors and stock brokers are nervous and uncertain about the impact of the decision. Their hesitation is what’s driving the markets down.
Now the question those of us in the real estate business need to be asking is will it affect the interest rate for mortgages. And the answer is… Probably.
Although the stocks directly being affected by the decision don’t actually tie in to the Fed’s decision to raise or lower the interest rate, the overall health of the market can. In fact, just over the past year, the Fed has demonstrated an unwillingness to raise the interest rate in the US based on the economic well being of foreign markets. Therefore, it’s possible to see the Fed making a decision on the rate based on this event.
Depending on how the markets fare in the coming weeks, we’ll see what the Fed decides to do, but for our money, it looks like the rate may either stay the same or even fall. We think the number may retrace below 4%, but that’s a story for another time.
We’ll check the rate in the upcoming week and keep you posted on what’s happening. For now, this slide in the market could prove to be a windfall for home buyers.
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