It looks like taxpayers won’t have to worry about shouldering the cost of a federal rescue for Fannie Mae and Freddie Mac, because it may not be necessary.

Shares of both financial institutions rose last week—an indication that they can survive the housing storm without financial assistance from the government. Fannie rose 43 cents while Freddie went up to 68 cents. Both government-sponsored enterprises appear to have enough money to cover billions of losses caused by troubled mortgages. This is also a positive sign that the housing market is slowly stabilizing. Incidentally, homebuyers are starting to show interest in purchasing homes. As a matter of fact, there was an increase in the number of new home sales last July. More home sales are expected in September and October because of low prices.

The Mortgage Bankers Association also reports an increase in mortgage applications last week. The 7.5 percent increase shows that more people are trying to purchase homes. Home purchase applications increased 10.5 percent, while refinance applications jumped 2.1 percent.

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