The stocks for Fannie Mae and Freddie Mac have been substantially depressed for years now. After the housing market collapse their establishments took a lot of the blame for the debacle. Unfounded, we all know now that the primary culprits were huge Stock Brokerage companies such as Goldman Sachs that hedged fantastic sums of money to drive the market down and thus make money on the way down. In the meantime, Fannie Mae and Freddie Mac took the hit for them.
Are Fannie Mae and Freddie Mac poised for a strong recovery? The answer to that seems to be yes. Housing trends are showing signs of strong stabilization. In our area alone the new housing starts are up 36 percent according to the local news. Moreover, as a Realtor here in Punta Gorda/Port Charlotte Florida I can personally attest to a definite strong change in our market. Our listing inventory is not nearly what is was and prices are nudging their way back up. I am finding it more and more difficult to find a home for my customers with less to choose from.
I don’t own stock but I do keep an eye on the Stock Market somewhat, especially if it is related to the housing market because I am a Realtor. It is interesting to see that Fannie Mae and Freddie Mac stock are being bought every day to the tune of over 2.5 million shares a day. Who is buying those stocks? I know that years ago the major retirement funds and others heavily bought and held those stocks in their portfolios. They lost a lot! But now with the worm turning are they secretly and slyly buying back in? If so, they stand a chance to gain billions of dollars as the housing market turns back upwards.
Do you think I am fooling around? Do you think I am dead wrong? Well consider this article from CBS Market Watch http://articles.marketwatch.com/2012-08-08/markets/33091561_1_fannie-mae-freddie-mac-first-quarter
I came across this article this morning. It seems that for the second quarter, Fannie posted a profit of $5.11 billion! Net revenue rose 11% to $5.82 billion! In addition, it did not need any money from the U.S. Treasury Department and even paid $2.9 billion in senior preferred dividends. Finally, the Chief Executive Timothy J. Mayopoulos stated that he expects financial results to be “substantially better than the past few years." Their strong recovery is vital! All ready the greed mongers are positioning themselves to buy up the stocks again.
As a Realtor, this is great news for my ears. Fannie Mae and Freddie Mac have been the backbone of the housing industry.