What's Brexit got to do with the housing recovery?

Many people didn't see the Brexit vote coming -- and the global market responded in kind last week when news broke that Britain had voted to leave the European Union.

But analysts are somewhat divided when it comes to assessing the risk to the U.S. housing market.

"The responding flight to safety and uncertainty about the global economy drove investors to bonds and gold," said Ali Wolf, Manager of Housing Economics at Meyers Research in a statement. "As a result of this investment strategy, both US Treasury rates and mortgage rates were pushed down almost instantly, and this decline could continue in the coming months. In addition, the likelihood of a Federal Reserve rate hike seems off the table for the remainder of 2016 given heightened global risks and increased market volatility (some are even suggesting a rate cut)."

"The likely boon of even lower mortgage rates for the US housing market comes at a time that other economic data has been surprising to the positive. For example, consumer spending is up as retail sales posted solid results for May, personal income is on the rise, and  housing supply grew (both in permits and months of new home inventory), albeit still at historically low levels. Risks in the economy haven't dissipated, but there are bright spots. As Janet Yellen, the Federal Reserve Chairwomen, would say, "it's important not to overreact to one or two reports" when the overall picture still looks favorable," added Wolf.

Over at Forbes, Lorraine Woellert wrote, "While the headlines look bad, remember that the U.S. economy remains fundamentally sound. And global unease has a silver lining for homebuyers—cheap loans." She added that while home price growth might slow, mortgages will get cheaper. This is bad news for the luxury home market, but the effects of Brexit are unlikely to affect the high demand for housing in the U.S.

At Trulia, the verdict was: "no one really knows, and that’s the problem."

"In the short term, for the U.S. housing market, the most direct threat isn’t from trade," wrote Trulia's David Weidner. "It’s about the financial system and banking. Every housing market, including the United States’, is sensitive to interest rates. How central banks, such as the Federal Reserve respond to the Brexit fallout –by keeping rates low, for instance – would constitute impact."

According to Trulia Chief Economist Ralph McLaughlin, global investors have a tendency to turn to U.S. debt and securities as a source of security. When they do that, it puts downward pressure on rates, which, again, means cheaper loans.

In the short-term, the consensus appears to be that the show will go on, especially given the strong fundamentals in our housing market. But market instability has a way of creating ripple effects.