Economy Watch: Freddie Mac in the Black
- May 09, 2013
Freddie Mac reported on Wednesday that it had a net income of $4.6 billion for the first quarter of 2013, compared to a net income of $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 GSE and its sister company, Fannie Mae, which caused the two to be put into conservatorship by the federal government in 2008.
The company is benefiting from the recent improvements in the housing market, particularly the slowdown in foreclosures. In 1Q13, Freddie Mac’s REO dispositions continued to exceed its volume of 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 U.S. government in the first quarter of 2013. As of the end of the first quarter, the company has requested $71.3 billion from the Treasury, but has also paid the Treasury cash dividends of $29.6 billion.
Vegas continues its housing recovery
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 market, which was arguably the hardest hit by the housing crash.
Vegas foreclosures and short sales are down. In April, 32.5 percent of all existing local home sales were short sales, down from 33.3 percent in March. Another 10 percent of all sales were REO, down from 11.2 percent in March. The remaining 57.5 percent of all sales 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 (which is what investors and speculators generally use). That’s up from 57.5 percent in March and approaching the peak of 59.5 percent in February.
The total number of properties listed for sales on GLVAR’s Multiple Listing Service increased in April, with 13,881 single-family homes listed for sale at the end of the month. 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 up 48.92 points, or 0.32 percent. The S&P 500 gained 0.41 percent and Nasdaq advanced 0.49 percent.