Brexit Benefits Mortgage Lenders

According to a recent article in National Mortgage News, mortgage lenders have begun to reap the benefits of the U.K.’s decision to leave the European Union, referred to as “Brexit.” The Brexit vote may have caused turmoil in other markets, but for the mortgage market, already-falling interest rates are expected to boost home purchases and refinancing. According to the article, the drop in rates comes as investors flee towards the 10-year Treasury note which serves as the benchmark for mortgage rates. This has created a “Brexit benefit” for lenders and borrowers.

10-year Treasury yields fell more than 30 basis points on Friday, June 24th, in the immediate aftermath of the vote, though it recovered about half of the drop-off by midday. "It should spur further purchase demand and strengthen the opportunity for first-time homebuyers to be able to get in," said Mark Fleming, Chief Economist of First American Financial. "First-time homebuyers are busy trying to snap up what little inventory they can find right now in the housing market and this only helps."

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