GSEs Post Profitable Q1

Despite a housing market riddled with short supply, high mortgage rates edging toward the 7%-mark, and continued affordability issues, both Fannie Mae and Freddie Mac reported profits in the first quarter of 2024.

Nationwide, in assessing the state of the nation’s housing marketplace, home prices grew 1.7% in the first quarter of 2024, according to Fannie Mae’s Home Price Index. The U.S. weekly average 30-year fixed-rate mortgage rate increased from 6.61% at of the end of 2023, to 6.79% as the close of the first quarter of 2024.

Fannie Mae’s Q1 highlights

As of March 31, 2024, Fannie Mae reported $4.3 billion in net income for the first quarter of 2024, with net worth reaching $82.0 billion. The GSE reported that its net income increased $377 million in Q1 of 2024 compared to the fourth quarter of 2023, primarily driven by a shift to fair value gains and a shift to a benefit for credit losses, partially offset by a decrease in net interest income.

“Fannie Mae reported strong results in the first quarter, delivering $4.3 billion in net income, marking our 25th consecutive quarter of positive earnings,” said Priscilla Almodovar, Fannie Mae’s CEO. “The strength of the U.S. economy, higher single-family home prices, and the credit quality of our book of business continue to be important factors affecting our performance. This quarter, we provided $72 billion in liquidity to the U.S. housing market. This helped 280,000 households buy, refinance, or rent a home and reflects our strong commitment to managing risk and fulfilling our vital role supporting America’s housing finance system.”

The $72 billion in liquidity provided by Fannie Mae in the first quarter of 2024 enabled the financing of approximately 280,000 home purchases, refis, and rental units. In Q1, the GSE acquired approximately 155,000 single-family purchase loans, of which more than 45% were for first-time homebuyers, and approximately 36,000 single-family refinance loans. Fannie Mae also financed approximately 89,000 units of multifamily rental housing in Q1 of 2024; a significant majority were affordable to households earning at or below 120% of area median income, providing support for both workforce and affordable housing.

Freddie Mac continues to make home possible

For Q1, Freddie Mac reported a net income of $2.8 billion, an increase of 39% year-over-year, primarily driven by higher net revenues. Net revenues of $5.8 billion, an increase of 19% year-over-year, driven by higher net interest income and higher non-interest income.

The GSE financed 194,000 mortgages in Q1, with 54% of these loans to low- to moderate-income families. First-time homebuyers represented 52% of Freddie Mac’s new single-family home purchase loans. In addition, the GSE financed 85,000 rental units, with 90% of eligible units affordable to low- to moderate-income families.

“Freddie Mac had a solid first quarter, as the company continued to serve low- and moderate-income families despite persisting affordability challenges in the housing market,” said Michael T. Hutchins, President and Interim CEO of Freddie Mac. “In fact, 54% of single-family homes and 90% of rental units Freddie Mac financed in the first quarter were affordable to families earning at or below 120% of area median income.”

During Q1, Hutchins was appointed to the role of Interim CEO as the GSE continues its search for a permanent CEO. Hutchins also became a member of Freddie Mac’s Board of Directors. Hutchins was named President of the GSE in 2020, and is a member of the company’s Senior Operating Committee. He will continue serving as President, and will took on the role of Interim CEO and Board member following the departure of CEO Michael J. DeVito.

Freddie Mac reported its new business activity of $62 billion in Q1 was up slightly from $59 billion it reported in the first quarter of 2023. The GSE’s mortgage portfolio of $3 trillion was up 2% year-over-year.

Click here for more on Fannie Mae’s Q1 financial results, and click here for more on Freddie Mac’s Q1 financial results.

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Picture of Eric C. Peck

Eric C. Peck

Eric C. Peck has 25-plus years’ experience covering the mortgage industry, most recently serving as Editor-in-Chief for National Mortgage Professional Magazine. He graduated from the New York Institute of Technology, where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books, and has served as Copy Editor for Entrepreneur.com.
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