U.S. mortgage rates fall to 3-year low courtesy of Brexit

Posted at 5:00 PM, Jul 01, 2016
and last updated 2016-07-01 20:00:52-04
The fear of a mass exodus from the European Union has subsided.  It's now been more than a week since the U.K. voted to split from the E.U., sending the global markets into a tailspin.
The dust, at least in the U.S., has settled.  Wall Street ended higher for the fourth straight day on Friday.  
"The market had two really difficult days in a row, followed by subsequent day after day after day of recovery," Michael Carlin, President of Wealth Management, LLC in Scottsdale, said.  "So the cumulative sum total of what the Brexit has taught us is that there has been no negative impact here in the U.S. yet."
In fact, if you're in the market to buy a home -- the Brexit saga made in cheaper.  Mortgage rates dropped to a three year low.  The average on a 30-year-fixed mortgage sits at 3.48, down more than half a percent from a year ago.  The 15-year fixed rate is now at 2.78 percent.  Investors have been fleeing to the safety of U.S. treasury bonds - causing yields on the bonds to drop.  Mortgage rates often move in sync with those yields.
"The stock market is prepared to worry later.  The bond market is preparing for trouble now," Carlin said. "Typically what happens is those two things will battle one another and at some point we'll find out who's right."