There looks set to be more real estate investment opportunities in USA, with Freddie Mac posting positive growth figures in the third quarter 2012. This is its fourth straight quarter of net profit rises, highlighting that the country's property market is well on the road to recovery. The mortgage financier recorded a USD 2.9 billion (GBP 1.8 billion approx) third-quarter profit, a rise of approximately USD 7 billion (GBP 4.4 billion approx) from the loss made during the penultimate quarter of 2011.
Donald Layton, Freddie Mac's chief executive, explained to the Financial Times that the profit was the result of "favourable market conditions, including the continued improvement in the housing market, as well as our ongoing efforts to minimise losses on our legacy book". With the rest of the sector improving, the time appears right to invest in real estate in the country while prices are low.
However, the country may not be out of the woods just yet, with industry experts calling for president Barack Obama to waste no time in leading phase two of the US residential real estate recovery. This must include collaborating with the sector to reduce uncertainty, especially relating to a raft of regulations facing property investors.
Dr Alex Villacorta, director of research and analytics at Clear Capital, told Property Wire: "Now that the election is finally behind us, there should be no more political risk in addressing the housing problem head on. President Obama's housing policies must evolve to turn the recovery's sprint into a marathon.
"With a re-election secured, president Obama has the opportunity to stimulate lending activity by being bolder on policy. National gains of 4.6 per cent over the year were enough to grab the attention of voters, and rightfully so." Nevertheless, caution has not been completely thrown by the wayside, Mr Villacorta added. Lenders are still reluctant to give money to many, which is causing a problem for the middle classes. Many want to seize the opportunities created by low prices, but are unable to secure the finances. By alienating this faction of society, the market isn't recovering as quickly as it could.
- Wednesday 14 November 2012