The MReport Webcast: Friday 8/7/2015

Fannie Mae's net income more than doubled from the first quarter to the second quarter due to fair value gains, according to an announcement from Fannie Mae on Thursday. The GSE's net income for Q2 was $4.6 billion, compared to $1.9 billion in the first quarter, totaling 6 point 5 billion dollars for the year. Despite the quarterly increase in net income, Fannie Mae is still lagging behind last year's pace of $14.2 billion for all of 2014.

The quarter-over-quarter increase in net income for Q2 2015 was largely driven by fair value gains, offset by credit-related expense that was negatively affected by an increase in interest rates. Fannie Mae's net fair value gains in Q2 totaled $2.6 billion, compared with losses of $1.9 billion in Q1. Increases in longer term interest rates that positively impacted the value of Fannie Mae's risk management derivatives were largely responsible for the fair value gains in Q2.

The housing market is slowly but surely inching closer to normal levels with the help of economic and job growth. According to the National Association of Home Builders First American Leading Markets Index released Thursday, markets in 75 of the approximately 360 metro areas nationwide have returned to or exceeded their last normal levels of economic and housing activity in the second quarter of 2015. The NAHB reported that the index's score increased on point to 0 point 92, which means that the nationwide average is at 92 percent of normal economic and housing activity.