How Will Brexit Affect the DFW Housing Market?

Yesterday, the UK voted to break it off with the EU.

After the results were announced, stocks around the world plummeted and the pound took a dive. Social media became flooded with “doom and gloom” narrative touting global recession, Armageddon, and the collapse of civilazation as we know it.

WHAT HAPPENS NOW?

Our phones have been ringing off the hook with inquiries about how this news will affect the local housing market.

Every time we see a major world event, the same pattern emerges.

While the global economy takes a step back, the negative impact on investors will redirect interests toward “save haven” vehicles. Those fleeing from risk will seek out gold, government bonds, and the greenback (specifically mortgage-backed securities), strengthening the US dollar against foreign currencies.

When there is more demand than there is supply, the interests rates drop down. The bond issuers can afford to lower those rates because people are buying those bonds, and that benefits US consumers. Bad economic news is ALWAYS good for mortgage rates and the long-term housing market.

WHAT ABOUT DFW?

The DFW Housing Market continues to thrive, and homeowners are enjoying the days of double digit appreciation. Unlike the “bubble” that was artificially created by the mortgage debacle of 2006 and 2007, what DFW is experiencing is a true demand curve, where inventory continues to be in short supply, lending is readily available, corporations are still moving into the area, and qualifed buyer demand continues to be high.

What is predicted to happen in the second half of 2016 leading into 2017 is that the affordability index will start to influence home prices and regulate the runaway rate of appreciation. Even a hot Seller’s Market doesn’t forgive the sin of over-pricing, and as Seller expectations start tipping above what median income earners can qualify for, the Buyer pool thins and competition lessens.

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