Mortgage and real estate companies are releasing their earnings reports for Q2 2022, providing information on the state of the housing market and where it might be headed.
NPR’s David Gura noted on Morning Edition that earnings reports “can shape our understanding of what the economy may look like in the future.”
“So while earnings reports and calls executives do with analysts may seem dry, not relevant to most people, they are worth paying attention to because companies have access to tons of data about themselves, their customers, talking about customer spending patterns, how they’re feeling,” he said.
Some major players in the mortgage industry released their reports this week.
- Freddie Mac said its earnings fell by 33% YOY, netting $2.5 billion for Q2. Net revenues fell 8% YOY to $5.4 billion, driven by a decline in non-interest income in Multifamily.
The company’s net interest income decreased by less than 1%, however.
“In the second quarter, Freddie Mac achieved solid financial results and continued to build equity to withstand potential economic stress,” said CEO Michael J. DeVito.
- First American also reported a significant decrease in year-over-year earnings, down 64%. Its total revenue was down 9% YOY.
But it saw an 11.2% increase from Q1 2022.
“Our second quarter business results were strong, with our title segment delivering a pretax margin of 13.9%, excluding net investment losses,” said Ken DeGiorgio, chief executive officer at First American.
“Total revenue, excluding net investment losses, was up 1 percent, as continued strength in the commercial business, growth in investment income, and revenue from recent acquisitions offset the decline in residential refinance and purchase activity.
- Mortgage originator and servicer Mr. Cooper Group saw a 77% decline in profits. In Q1, it netted $658 million. In Q2, it netted only $151 million.
In June, Mr. Cooper laid off 5% of its staff, most of whom worked in loan originations.
“In addition to generating portfolio growth, servicing enjoyed higher profitability in the second quarter thanks to the rise in interest rates, while Originations did a fantastic job with customer retention, achieving and then exceeding our strategic recapture target and helping borrowers achieve their financial goals with cash-out refinancings,” said Chris Marshall, Vice Chairman and President.