Britain’s historic vote to leave the European Union continues to reverberate around the world. U.S. economists have warned that the vote to leave the EU would put a strain on the nation’s already sluggish economy.
But there are financial winners amid the effects, such as American homebuyers.
CCTV America’s Roza Kazan reports from Chicago.
Real estate markets surge post-BrexitBrexit has left attractive mortgage rates beckoning U.S. buyers into the market. CCTV America's Roza Kazan reports.
With interest rates at historic lows post-Brexit – averaging 3.4 percent on a 30-year mortgage – taking out a mortgage seems pretty compelling.
It may not seem obvious but many U.S. homebuyers have the U.K. to thank. With Britain’s vote to leave the EU, investors got nervous about the global economy. Looking for a safe place to park their cash, they fled to U.S. government bonds.
Safe but not very lucrative, the yield, or interest rate, on the benchmark U.S. 10-year Treasury note this week closed below 1.4 percent for the first time on record. Even during the Great Depression, interest rates were never that low.
The low Treasury rates serve as benchmarks for other types of lending rates, like car loans, credit cards and mortgages. Which is why, analysts said, now is a good time to buy a home or refinance a mortgage you might already have.
The U.S. Mortgage Bankers Association reports mortgage applications surged 14 percent last week, to their highest levels in more than three years. Refinance applications are also up 21 percent.
But how long will the low rates last? Economists say it depends.
Senada Adzem discusses Brexit’s impact on home sales
For more on Brexit’s impact on real estate markets, CCTV America’s Michelle Makori spoke to Senada Adzem, realtor associate and executive director of luxury sales with Douglas Elliman Real Estate.