Fannie, Freddie Report First-Quarter Financials
Written By: Joel Palmer, Op-Ed Writer
Fannie Mae and Freddie Mac delivered lower year-over-year financial results in the first quarter of 2023 in what both companies termed a “volatile” and “uncertain” market.
The two enterprises released their quarterly results last week.
Fannie Mae generated net income of $3.8 billion in the first three months of 2023 on revenue of $6.8 billion. Those numbers were down only slightly from the $4.4 billion the company earned during the same period a year ago on $7.5 billion in revenue.
“We delivered strong first quarter results in a volatile market and remain committed to being a source of stability for the housing finance system throughout all economic cycles,” said Fannie Mae CEO Priscilla Almodovar. “We are able to do so because of the changes we've made to improve the resilience of our business, our focus on risk management, and strong liquidity. This allows us to continue to facilitate affordable, equitable, and sustainable access to homeownership and rental housing.”
Fannie acquired 170,000 single-family purchase loans in the first quarter, totaling $56.5 billion. That was a drop of more than 20 percent from the volume of purchase loans acquired in the previous quarter.
Fannie acquired 45,000 refinance mortgages totaling $11 billion, down from $14.5 billion in the fourth quarter of 2022.
Fannie said that over 90 percent of the company’s single-family conventional guaranty book of business as of March 31, 2023 had an interest rate below 5.50 percent, which was more than 80 basis points below the average interest rate for a single-family 30-year fixed-rate mortgage as of that date. This means few of these will likely be refinanced at current rates.
The average single-family conventional guaranty book of business in the first quarter of 2023 declined by $322 million from the fourth quarter of 2022. Fannie said this was driven by acquisition volumes being lower than loan paydowns during the quarter.
New multifamily business volume was $10.2 billion in the first quarter compared with $18.6 billion in the fourth quarter of 2022. This decline in new multifamily business volume was driven by less overall market activity.
About the Author
As an NAMU® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
