Freddie Mac yesterday reported net income of $2.8 billion for the second quarter of 2024, a decrease of 6% year-over-year. The government-sponsored enterprise (GSE) claims the decrease was primarily driven by a credit reserve build in the current period compared to a credit reserve release in the prior year period, partially offset by higher net revenues.
Net revenues were $6 billion for the second quarter of 2024, up 12% year-over-year, driven by higher net interest income and higher non-interest income.
"Freddie Mac's net worth increased to $53.2 billion, representing a 27% increase year-over-year. The total mortgage portfolio was $3.5 trillion, a 2% increase year-over-year," said James Whitlinger, interim chief financial officer for Freddie Mac. "Net income for the quarter was $2.8 billion, and net interest income was $4.9 billion, up 9% year-over-year."
Freddie Mac's net interest income for the second quarter of 2024 was $4.9 billion, up 9% year-over-year, primarily driven by continued mortgage portfolio growth and lower expenses related to debt in hedge accounting relationships. Non-interest income for the second quarter of 2024 was $1.1 billion, up 30% year-over-year, primarily driven by higher guaranteed income and higher net investment gains.
Provision for credit losses was $0.4 billion for the second quarter of 2024, primarily driven by a credit reserve build in the single-family segment attributable to new acquisitions. The benefit for credit losses of $0.5 billion for the second quarter of 2023 was primarily driven by a credit reserve release in single-family due to improvements in house prices, partially offset by a credit reserve build in multifamily.
Freddie Mac's new business activity during Q2 2024 was $85 billion, up from $83 billion from the same time last year. Its mortgage portfolio was $3.1 trillion, up 2% year-over-year.
Freddie Mac financed 257,000 mortgages in Q2 2024, with 53% of eligible loans affordable to low- to moderate-income families. Additionally, the company financed 92,000 rental units, with 93% of eligible units affordable to low- to moderate-income families. The serious delinquency rate for the single-family segment decreased to 0.50%, while the multifamily segment saw an increase in the delinquency rate to 0.38%.
"In the second quarter, we financed 212,000 home purchases, with 53% of primary home purchases being first-time homebuyers and 53% affordable to low and moderate-income families," said Whitlinger. "On the multifamily side, approximately 93% of 92,000 eligible rental units we financed were similarly affordable."
