Freddie Mac generated $2.94 billion in net income in the second quarter, up 41% from the first quarter and 20% year-over-year. Like its larger government sponsored enterprise cousin Fannie Mae, Freddie Mac’s second quarter was boosted by rising home prices.
Executives on Wednesday said home prices rose 2.4% through the second quarter and are forecast to inch up another 0.8% by year’s end. As such, Freddie freed up $537 million it had in loss reserves, contributing to its larger profit over the prior quarter.
“The second quarter saw single-family home prices stabilize, influenced by strong demand, higher residential mortgage rates, and limited homes for sale,” Freddie CEO Michael DeVito said in a statement. “Renters continue to be cost burdened as rents rose in the face of softening multifamily property prices. Freddie Mac remained focused on its mission and delivered a solid quarter, helping 372,000 buy, refinance, or rent a home, the majority of them affordable to low- or moderate-income borrowers and renters.”
Purchase loans represented 89% of Freddie’s business in the second quarter; just 11% came from refinancings.
Here are some additional highlights from the second quarter call:
- Net revenues totaled $5.3 billion, down 1% year-over-year, as lower net interest income was partially offset by an increase in non-interest income.
- Financed 258,000 mortgages, with 55% of eligible loans being affordable to low- to moderate-income families, and enabled 102,000 first-time homebuyers to purchase a home.
- New business activity of $83 billion in single-family in Q3, down 40% year-over-year due to lower volume.
- Single-family mortgage portfolio reached $3 trillion, up 3% year-over-year, as portfolio growth has moderated since rates began climbing.
- Freddie Mac completed approximately 20,000 single-family loan workouts.
- Roughly 62% of its single-family mortgage portfolio is covered by credit enhancements.
- Multifamily new business activity came in at $13 billion, down 13% year-over-year.
- Multifamily mortgage portfolio in Q2 was $427 billion, up 3% year-over-year.
- Freddie Mac’s net worth reached $41.96 billion, up from $39 billion a quarter ago.
