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Fannie Mae turns a profit, no more government loans
Fannie Mae reported a first quarter profit of $2.7 billion Wednesday, and will not require Treasury Department funds to balance its books for the first time since 2008, according to Business Week.
Fannie Mae, profit, first quarter 2012, growth, mortgages, home prices
Fannie Mae reported a first quarter profit of $2.7 billion Wednesday, and will not require Treasury Department funds to balance its books for the first time since 2008, according to Business Week. Many are taking this as a sign that the housing market is on its way to recovery.
The company says several factors contributed to its prosperous quarter. Home prices continued to decline, but at a slower rate, at the start of 2012. The National Association of Realtors supported this trend, noting the median sale price of single-family homes was up year-over-year in 74 metropolitan areas (out of 146 measured).
More specifically, prices actually rose on single-family real estate-owned (REO) properties; this in turn led to a reduction in Fannie Mae’s inventory. Executives also cited lower single-family serious delinquency rates.
Along with the good news from Fannie Mae, Fiserv announced Tuesday that at present, for a median-priced home, the average monthly payment represents just 12 percent of median-family income. This is the lowest recorded percentage since Fiserv began tracking the data in 1971.
Fiserv cited falling home prices and low mortgage rates as the cause of the reduced percentage.
To read Fannie Mae’s press release, click here.