Do Geopolitical Events Influence the Housing Market?

Fleming: “What happens outside our borders matters to our own success. We cannot prevent the trends of economic globalization and generally are one of its biggest beneficiaries.”

IRVINE, CA—Events like an affirmative “Brexit” vote (scheduled for today) can create economic uncertainty that causes the financial markets to react by fleeing to safety, First American Financial Corp.’s chief economist Mark Fleming tells GlobeSt.com. In a recent report from the firm, Fleming said, “This week, the yield on the 10-year Treasury note tumbled further to 1.59% after the June meeting of the Federal Open Market Committee and the committee’s decision not to raise the Federal Funds Rate. This leaves fewer opportunities this year for a rate hike, although, as I wrote in my blog post last week, this will have little impact on the health of the housing market and housing affordability. In fact, FOMC decisions are currently non-event events for the housing market. In the coming months, global uncertainty due to events like ‘Brexit’ or other forms of geo-political unrest may have more influence on mortgage rates than any actions taken by the Fed.”

We spoke exclusively with Fleming about geopolitical events like Brexit and their impact on the housing market.