FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 08 August 2016

Handicapping Brexit - Winners And Losers

from CoreLogic

The world has now had a couple of weeks to get over the shock of Brexit or the decision of Britain to exit the European Union. As week-three begins, global equity, debt and currency markets have stabilized. What does Brexit mean for the US mortgage and real estate markets for the next few months?

Here's a quick rundown on potential winners and losers in the mortgage and real estate industries.


The US Mortgage industry. That's because the flight to safety has depressed yields and should give refinances a modest boost and provide further support to the purchase market. While the consensus is that mortgage rates will substantially fall, it's important to keep in mind the components that determine rates. Since Brexit occurred, the risk free benchmarks such as the 10-year treasury has declined by about 40 basis points. However, credit spreads rose which partly offset the drop in treasuries. That means wholesale mortgage rates fell by 29 basis points and have stabilized (Figure 1). If future turbulence occurs and drops treasuries further, keep in mind the pass through to mortgage rates will be more muted.

First time buyers and Consumers with ARM loans. The likelihood that the Federal Reserve will raise rates has been further delayed. So first time buyers can count on continued low mortgage rates to help with affordability issues. Similarly, re-setting adjustable rate loans will have less of a rate shock, and in some cases may even go down. In addition to the downward pressure on 30-year rates from market events, there is a push to drop both the FHA mortgage insurance premium and the GSE's loan-level price adjustments, which will increase affordability.


High-end sellers, developers and realtors. The US equity markets have plateaued over the last 18 months and volatility has increased. This is an important development for the high end because as we have seen earlier (link to blog) there is a strong correlation between stock market indices and high-end ($1 million-plus) sales.

The private label securities market. Issuers and securitizers need more yield to make these deals work, and re-start the non-agency RMBS market. Continued low interest rates will push these deals even farther into the future.


1 Read Russell McIntyre's Brexit blog here.

© 2016 CoreLogic, Inc. All rights reserved.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Contributors


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
Comments on Feyerabend’s ‘Against Method’, Part II
Comments on Feyerabend’s ‘Against Method’, Part III
News Blog
Rail Week Ending 15 October 2016 Paints A Negative Economic View
What Is The New Normal For U.S. Growth?
Affordable Care Act And Its Effect On Part-Time Employment
The Speed Of Filling Jobs Is Declining
First Working Eggs Made From Stem Cells Points To Fertility Breakthrough
Infographic Of The Day: Mega Machines
Online Platforms Double Down On TV Programming
A History Of Mars Missions
How Tesla Out Innovates Traditional Carmakers
Schiaparelli's Descent To Mars In Real Time
September 2016 Existing Home Sales Still Not Excellent
September 2016 Leading Economic Index Improves Indicating Moderate Growth Ahead.
October 2016 Philly Fed Manufacturing Survey Declines But Remains In Expansion.
Investing Blog
Options Early Assignment - Should You Worry?
The 401k Plan Manager 17 October 2016
Opinion Blog
Prop. 51 Versus A State-Owned Bank: How California Can Save $10 Billion On A $9 Billion Loan
Obama's Middle East Policy Has Been A Complete Failure - Or Has It?
Precious Metals Blog
How Will The Election Outcome Impact Precious Metals?
Live Markets
21Oct2016 Pre-Market Commentary: Wall Street Pointing To A Lower Opening Despite So So Corporate Earnings, Markets May Recover Be Late Afternoon
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

Crowdfunding ....



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved