Q2 2024 Earnings Summary
Reported on Jan 7, 2025 (Before Market Open)
Pre-Earnings Price$1.32Last close (Jul 29, 2024)
Post-Earnings Price$1.33Open (Jul 30, 2024)
Price Change
$0.01(+0.76%)
- Strong Financial Performance: Fannie Mae reported $4.5 billion in net income in the second quarter of 2024, an increase from $4.3 billion in the first quarter. The company's net worth reached $86.5 billion, further strengthening its financial stability.
- Healthy Credit Profile and Stable Book of Business: The single-family guaranty book of business remains strong, with a weighted average mark-to-market loan-to-value ratio of 50% and a weighted average credit score at origination of 753. The single-family serious delinquency rate remained near historically low levels at 48 basis points.
- Positive Outlook and Market Position: Fannie Mae continues to provide significant liquidity to the housing market, helping 330,000 households buy, refinance, or rent a home in the second quarter. The company is also innovating to reduce obstacles for consumers, such as limited credit history and high upfront costs, and is advancing ways to connect global capital to U.S. housing through the issuance of social bonds.
- Decline in multifamily property values and expected increase in serious delinquencies: Multifamily property values have declined nearly 20% from the peak in July 2022 to June 2024, and a portfolio of approximately $600 million in adjustable rate conventional loans is anticipated to become seriously delinquent.
- Anticipated pressure on the multifamily market due to elevated maturities and refinancing challenges: Higher interest rates may reduce the ability of multifamily borrowers to refinance their loans prior to maturity, potentially leading to increased delinquencies and property value declines. Near-term maturities are expected to be elevated, which could put additional pressure on the multifamily market.
- Affordability concerns and low consumer sentiment affecting single-family housing: Affordability challenges, together with low inventory and high mortgage rates averaging 7%, are limiting the number of buyers, with only 19% of consumers stating that it's a good time to buy a home. This may negatively impact Fannie Mae's single-family business.