Fannie Mae and Freddie Mac both post third quarter profit showing housing market stabilizing. Fannie Mae posted a 1.8 billion dollar profit during the third quarter giving the once troubled institution its fourth straight profitable month. Fannie Mae’s smaller sibling Freddie Mac put its own stamp of approval on the US housing market with a 2.9 billion dollar profit for the third quarter.
“We are seeing signs of sustained improvement in housing,” Fannie President and CEO Timothy Mayopoulos said in a statement. “Our financial condition has improved markedly.” Says it all when it comes to expressing how Fannie Mae has already paid back 23 billion of the 116 billion it received from the federal government. And the huge swing from posting a 5.1 billion loss in the third quarter of last year to a 1.8 billion profit in the third quarter of this year.
I think its safe to start patting the United States of America on its back for the resilience we have shown as a country. With the housing market returning to stability after a 5 year implosion says its likely we will see people headed back to work as unemployment gradually declines.
Thirty-eight states are now represented by the National Association of Home Builders (NAHB)/list of improving markets. The Index of Improving Markets (IMI) increased by 22 metro areas giving us 125 total markets. This increase gives us nearly 80% of all states in the union showing improvements in the housing market, which is sure to lead to increased builder confidence.
The IMI lists housing markets that have shown improvement for six consecutive months from their troughs in three different measures. These measures include data from the Bureau of Labor Statistics (BLS) based on employment figures, issued permits for new construction of single family homes, and changes in home prices from Freddie Mac’s mortgage data.
According to Barry Rutenberg data included in the IMI having a wide geographic distribution “shows that a housing recovery is firmly taking root and helping generate needed jobs and economic growth across much of the country,” but is it? Many economists are not nearly so positive about positive market information. This being the case because of the looming shadow inventory of properties being held back from foreclosures by banks.