Fannie Mae Turned A Profit In Q1 But Couldn’t Best Expectations

Fannie Mae’s Q1 earnings fell short of expectations, but the GSE turned a profit last quarter.

The mortgage giant reported $4.3 billion in net income for Q1 2024, up from $3.9 billion in Q4 2023 but lower than analysts expected.

Its overall revenue was $7.1 billion, a sturdy sum but lower than expectations of $7.68 billion.

Leaders at the GSE focused on the fact that Fannie Mae has turned a profit for 25 consecutive quarters. 

“The strength of the U.S. economy, higher single-family home prices, and the credit quality of our book of business continue to be important factors affecting our performance. This quarter, we provided $72 billion in liquidity to the U.S. housing market. This helped 280,000 households buy, refinance, or rent a home and reflects our strong commitment to managing risk and fulfilling our vital role supporting America’s housing finance system,” CEO Priscilla Almodovar said in a statement.

The driving force of the results was a $579 million shift to fair value gains from fair value losses at the end of last year. In line with market forces, Fannie Mae’s single-family loan acquisition volume was down 11% QoQ.

Fannie’s results may have been lackluster in some experts’ eyes, but the GSE staying profitable is a distinction in the industry. Independent mortgage companies are struggling to remain afloat as high rates keep applications and refinances down.

Mortgage applications slipped last week as rates jumped to 7.29%, their highest point since November 2023.

Rocket Mortgage and United Wholesale Mortgage, two of the nation’s biggest players, both reported losses at the end of 2023. More earnings reports for Q1 2024 will roll out in the coming weeks.

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