Economy Watch: Freddie Mac in the Black; Las Vegas Home Sales Improve
- May 09, 2013
Freddie Mac reported on Wednesday that it earned net income of $4.6 billion in the first quarter, compared to $4.5 billion for the fourth quarter of 2012. That’s a far cry from the losses of the worst days of the recession for the government-sponsored enterprise and its sister company, Fannie Mae, which caused the two to be put under federal conservatorship in 2008.
The company is benefiting from recent improvements in the housing market, particularly the slowdown in foreclosures. During the first quarter of 2013, Freddie Mac’s real estate-owned dispositions continued to exceed its REO acquisitions. The length of the foreclosure process and a high volume of foreclosure alternatives are also causing fewer Freddie Mac loans to proceed to foreclosure, and thus fewer properties transitioning to REO.
Freddie Mac received no money from the federal government in the first quarter. All told, the company has requested $71.3 billion from the Treasury, but has also paid the Treasury cash dividends of $29.6 billion.
Las Vegas Housing Recovery Continues
The Greater Las Vegas Association of Realtors reported on Wednesday that the total number of existing local homes, condos and townhomes sold in April was 3,789. That’s up from 3,642 in March, but down from 3,924 in April 2012. Still, the numbers are a lot better than they used to be in the Las Vegas market, which was arguably the hardest hit by the housing crash.
Foreclosures and short sales also declined last month. In April, 32.5 percent of all existing local home sales were short sales, down from 33.3 percent in March. Another 10 percent were REO, down from 11.2 percent in March. The remaining 57.5 percent were the traditional type, up from 55.5 percent in March. In April, GLVAR also reported that 59.3 percent of all existing local homes sold were purchased with cash (the favored payment method of investors and speculators). That’s up from 57.5 percent in March and approaching the peak of 59.5 percent in February.
The total number of single-family homes listed for sales on GLVAR’s Multiple Listing Service increased to 13,881 in April. That’s up 1.4 percent from the end of March, but down 22.4 percent from one year ago.
Wall Street had an up day on Wednesday, with the Dow Jones Industrial Average rising 8.92 points, or 0.32 percent. The S&P 500 gained 0.41 percent and Nasdaq advanced 0.49 percent.