Freddie Mac and Fannie Mae navigated the 2023 housing market with relative ease, according to their latest financial reports. And while they might not have seen lots of home sales or refinances, the increased price of housing helped boost their bottom lines.
Freddie Mac saw a 65% surge in fourth quarter net income to $2.9 billion, while Fannie Mae reported a net income of $3.9 billion. When it comes to income for the full year, Freddie Mac reported $10.5 billion, an increase of 13% year-over-year, and Fannie Mae reported $17.4 billion in earnings, an increase of $4.5 billion.
According to the earnings report, Freddie Mac funded 955,000 mortgages, down from 1.8 million in 2022. At least 51% of home purchases were made by first-time buyers, the highest percentage in three decades according to Freddie Mac.
The serious delinquency rate for single-family homes remained steady at 55 basis points, down from 66 bps last year. However, the multifamily delinquency rate rose to 28 bps, attributed to senior housing and small-balance loan portfolios, with 89% of such loans covered by credit enhancement.
For Freddie Mac this growth was primarily fueled by a credit reserve release in single-family in 2023, compared to a credit reserve build in the same sector in 2022.
Net revenues for the full year totaled $21.2 billion, remaining relatively stable year-over-year. Net interest income increased to $18.5 billion, driven by higher investments' net interest income resulting from elevated short-term interest rates. However, non-interest income decreased to $2.7 billion, primarily due to the absence of spread-related gains on commitments to hedge the Single-Family securitization pipeline, which occurred in the previous year.
The company provided financing for 155,000 multifamily rental units and 67% of eligible multifamily rental units financed were affordable to low-income families.
Fannie Mae also had a successful year in a market where home prices grew 7.1% and the weekly average 30-year fixed rate mortgage increase from 6.42% at the end of 2022 to 6.61% at the end of 2023.
“The fourth quarter capped another successful year. Fannie Mae reported $3.9 billion in net income, marking our twenty-fourth consecutive quarter of positive earnings," Fannie Mae CEO Priscilla Almodovar said. "In 2023, we delivered $17.4 billion in earnings and continued to rebuild our capital and further strengthen our financial stability."
Fannie Mae acquired approximately 805,000 single-family purchase loans, of which more than 45% were for first-time homebuyers, and approximately 179,000 single-family refinance loans during 2023. It also financed approximately 482,000 of multifamily rentals.
Fannie Mae also provided $369 billion in liquidity in 2023, enabling approximately 1.5 million home purchases, refinancings and rental units.
The company acquired approximately 805,000 single-family purchase loans in 2023, with over 45% targeted towards first-time homebuyers, and it financed approximately 482,000 units of multifamily rental housing in 2023, with a significant majority being affordable to low- to moderate-income households.
