The U.S. mortgage financing companies are gaining attention of William Ackman, who is the owner of a hedge fund known as Pershing Square Capital Management. Expressing his views, he said that Federal Home Loan Mortgage Corp (OTCBB:FMCC) and Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) are two mortgage financing companies he intends to bet on in 2015. The two companies offer lucrative risk-reward in the capital markets right now.
The number one hedge fund
Ackman’s hedge fund, Pershing Square was ranked as the top most hedge fund in 2013. It provided a 40% return in 2013. Most of the investors closely watch investment bets of Ackman. Now when Ackman is bullish on Federal Home Loan Mortgage Corp (OTCBB:FMCC), investors will monitor all the news and developments related to mortgage financing companies. Ackman first expressed his positive views on the sector in late 2013.
In the report released by the National Association of Home Builders, home builder confidence dropped to 55 in February compared to adjusted level of 57 in January. It was below the analysts’ expectations of 58. The report signals that the housing sector may not have a smooth ride in 2015. The news will add to volatility in Federal Home Loan Mortgage Corp (OTCBB:FMCC)’s stock price. The reading is still above the reading of 50, which implies conditions in the market remains positive.
U.S. housing starts rose 4.4% in December 2014 from a month earlier. The sales of single-family homes grew at the fastest rate over six years. It indicates that the market is improving after years of malaise. The NAHB index, which measures expectations for sales, came at 61. The prevailing interest rates on mortgage home loans are still near historic lows. The average interest rate on a thirty-year fixed rate home mortgage was 3.69% last week compared to 4.3% in February 2014, according to Federal Home Loan Mortgage Corp (OTCBB:FMCC).