On the United Kingdom’s vote to exit the European Union (a.k.a “Brexit”)

One of my lender associates sent this email and I thought I would share it with you.

On the United Kingdom’s vote to exit the European Union (a.k.a “Brexit”)

The Brexit vote is over, and 52 percent of UK citizens voted to exit the EU, leaving a lot of political and economic uncertainty in the UK, Europe and the rest of the world. The UK Prime Minister, David Cameron, has resigned and Boris Johnson is the leading candidate to replace Cameron.

We’ve addressed the potential upsides and downsides with Supreme’s Senior Vice President of Capital Markets, Steven Chiou.

Q: How will Brexit negatively impact economics globally?

A: Forty-four percent of UK exports go to EU countries. Those exports may now be subject to heavy tariffs and more restrictions. This means the UK’s GDP for 2016 may be now down to zero and GDP for the EU may be lowered by .25 to .50 for 2016. Stock markets plunged today while investors sold stocks and moved money into safe-haven US Treasury Bonds or Mortgage Backed Securities (MBS).                                                     

Q: Should we be concerned about global economic stability?

A: All central banks in the world have committed to providing liquidity to calm financial markets. This exit will also be a two year process, so change should come more slowly, not suddenly.

Q: What does the dip in the stock market mean for the mortgage industry?

A: The 10 year treasury gained 1.625 points in price and 30 year MBS current coupons gained .625 percent. Supreme’s rate sheet price improved from .50 percent to .75 percent this morning.* Essentially, this occurrence is favorable for the bond market and mortgage business, as the rates are going to stay low for a while.

*For consumers, it’s an opportune moment to buy that dream home, or refinance loans for a better rate.

Please feel free to reach out with any questions or updates with any clients you would like me to work on!

Michael Haigh

Branch Manager – NMLS# 200819

415.269.4461 (cell)

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Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

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The Caton Team - Realtors

Sabrina & Susan are native Californians - born and raised in the Silicon Valley with a passion for Residential Real Estate. A mother and daughter-in-law duo called - The Caton Team. With over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time. Call | Text at: 650-799-4333 | Email Info@TheCatonTeam.com The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true. The Peninsula is our backyard - let us help make it yours. We represent Buyer’s and Seller’s throughout the Bay Area. The Caton Team – Susan & Sabrina A Family of Realtors Effective. Efficient. Responsive. What can we do for you?

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