This Tuesday, the U.S. stock market saw a reduction in gains during intraday trading, with the S&amp;P 500 index, which opened higher, turning negative in the morning. However, real estate stocks performed well, led by the government-supported mortgage agencies known as the &#34;two GSEs&#34;—Freddie Mac and Fannie Mae.
On January 14th, Tuesday, during the early trading session of the U.S. stock market, the Federal Home Loan Mortgage Corp., commonly known as Freddie Mac, saw its trading price in the pink sheet market reach a daily high, rising 29% intraday, marking the largest intraday gain since August 5, 2008, with a cumulative increase of over 50% in the last five trading days.
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The Federal National Mortgage Association, commonly known as Fannie Mae, saw its trading price in the pink sheet market rise over 20% on Monday, reaching a daily high of 31.7% in the morning, with a cumulative increase of over 60% in the last five trading days, both set to reach new closing highs since 2008.
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Among other real estate stocks, KB Home initially rose over 9%, while Dream Finders Homes and Installed Building Products saw initial gains of over 5% and 4%, respectively, before giving back some of their gains. The iShares U.S. Home Construction ETF (ITB) rose over 2% during intraday trading.
This Tuesday, Freddie Mac and Fannie Mae are expected to see significant double-digit gains following their rise on January 3rd. On January 3rd, these two stocks closed up approximately 28.5% and 30%, respectively. This surge in the two GSEs' stock prices began after the Biden administration announced a &#34;orderly&#34; framework for the release from conservatorship, allowing both companies to potentially end the government conservatorship that has lasted for 16 years since 2008.
Wallstreetcn mentioned that earlier this month, the U.S. Treasury Department and the Federal Housing Finance Agency (FHFA) stated that they would issue new guidelines, reassigning the Treasury Department the final approval authority to remove Fannie Mae and Freddie Mac from conservatorship. In the future, if Fannie Mae and Freddie Mac prepare to exit government conservatorship, the Treasury must first review and approve the process.
The new guidelines aim to ensure that the end of conservatorship can proceed &#34;orderly,&#34; as the U.S. government hopes to ensure that the operations of these two GSEs do not suddenly lose oversight and regulation, thereby posing risks to the financial or housing markets.
For Fannie Mae and Freddie Mac, exiting conservatorship will be an important milestone in their corporate history. The two GSEs were created during the Great Depression of the 20th century as a government initiative to rescue the economy and promote the development of the housing market
The creation of the two government-sponsored enterprises (GSEs) by the U.S. Congress was intended to support the real estate market by ensuring affordable mortgage financing.
During the financial crisis of 2008, the two GSEs fell into financial distress, suffering severe blows and facing the risk of bankruptcy. To prevent the collapse of these two companies from triggering a crash in the U.S. housing market, the U.S. government decided to take them over and provided approximately $187.5 billion in financial assistance.
This funding helped Freddie Mac and Fannie Mae weather the crisis. In exchange for the taxpayer-funded bailout, the U.S. federal government received preferred shares in both companies, granting the Treasury priority in dividends and asset distribution. Since then, Freddie Mac and Fannie Mae have entered a &#34;conservatorship&#34; status, with the government directly intervening in and managing their operations, while also limiting their independence.
Ending the conservatorship would enable them to operate independently again and restore market operations. This was an effort that occurred during Trump's first presidential term.
At the end of last year, hedge fund mogul and billionaire Bill Ackman predicted that the Trump administration would lift the government's conservatorship over the two GSEs, stating that this move would benefit shareholders of both companies, including himself. He also anticipated that the two companies might go public around 2026

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On Tuesday, during intraday trading, Freddie Mac rose more than 30%, while Fannie Mae increased over 60% and 50% in the last five trading days, respectively. This surge for the two companies began after the U.S. government announced a new framework for an "orderly" exit from conservatorship, giving both companies hope to end the government conservatorship era that has persisted since the 2008 financial crisis

- On January 14, 2025, U.S. stock markets saw a decline, but housing stocks, particularly government-supported mortgage firms Fannie Mae and Freddie Mac, performed well, with Fannie Mae rising 29% and Freddie Mac over 20% during trading.  
- This surge follows the Biden administration's announcement of a framework for an "orderly" exit from government conservatorship, which has lasted since the 2008 financial crisis.  
- The new guidelines from the U.S. Treasury and FHFA aim to ensure a smooth transition for these companies, marking a significant milestone in their history and potential return to independent operations.

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"Freedom" in sight, "two houses" rise! Freddie Mac surged 29% during trading, marking the largest increase since 2008