08/29/2025
DID YOU KNOW?
* US GDP rose at a 3.3% annualized pace in the April-through-June, better than the initial 3% estimate as well as the 3.1% Dow Jones estimate. The US economy is growing at a 2.2% pace in the 3rd quarter, according to the Atlanta Fed’s GDP Now measure. Home contract cancellations were around 15% with cancellations most prevalent in Texas and Florida: higher rates were seen in San Antonio (22.7%), Fort Lauderdale (21.3%) and Tampa (19.5%). The 10-year treasury dipped to 4.22%.... (CNBC)
* As August ends, July figures are out: Pending home sales dropped 0.4% in July from June...but were still 0.7% higher from July of 2024. (CNBC)
* Will Fannie Mae and Freddie Mac go IPO this year and be publicly traded? This could revolutionize the mortgage industry. Without the implicit government guarantee, Mortgage Backed Securities could be seen as riskier by investors, who could demand higher yields, leading to higher mortgage interest rates for borrowers. Lenders might tighten lending standards and credit availability, making it harder for some borrowers to qualify for a mortgage. The ability to offer and rely on rate-lock agreements, which protect borrowers from rising rates during the closing process, could be reduced, creating more uncertainty for buyers, The companies' core function is to buy mortgages from lenders and package them for investors, ensuring money flows into the housing market. A shift to a purely private market could reduce this critical liquidity and the overall volume of lending. Institutional investors would demand higher yields for MBS to compensate for the increased risk, leading to higher costs for lenders. Higher rates and tighter credit could dampen demand for homeownership, potentially slowing transaction volumes for real estate agents and brokers. Developers relying on Fannie and Freddie's multifamily programs might face greater difficulty securing favorable terms, particularly if mission-driven lending requirements are diluted in a private model. A privatized model could also theoretically lead to more innovation in the long run, with private capital exploring new mortgage structures to meet consumer needs This would require a thoughtful restructuring that addresses the loss of government backing. John Paulson and Bill Ackman's Pershing Square owns about 220 million shares of the two companies, so they are not entirely government owned entities right now.....
