Why Fannie Mae and Freddie Mac Soared Today
Shares of government-sponsored mortgage giants Fannie Mae (OTC: FNMA) and Freddie Mac (OTC: FMCC) were rocketing higher on an overall down day for the markets, appreciating 11.4% and 10.9%, respectively, as of 2:50 p.m. ET.
Given both companies' exposure to volumes of mortgages made in the United States, it's perhaps no surprise that both companies have seen their share prices plummet over the past year, as the Federal Reserve has rapidly raised interest rates and the housing market has ground to a halt. Fannie Mae is down 42% over the past year, and Freddie Mac is down 44%.
However, a major homebuilder sentiment report today offered a ray of hope that the housing market may be bottoming out. With a beaten-down share price, both stocks shot up on the incrementally positive news.
Source Fool.com
