Government-sponsored enterprise (GSE) Freddie Mac reported a 65% annualized increase in income stemming from its single-family mortgage programs in fourth-quarter 2023, along with a 13% increase in net income for the full year, according to quarterly and annual earnings reports released on Wednesday.
The full-year profit for 2023 reached $10.5 billion, the report stated. This represented a 13% year-over-year increase that was “primarily driven by a credit reserve release in single-family in 2023 compared to a credit reserve build in single-family in 2022,” and was partially offset by higher non-interest expenses.
The GSE financed 955,000 mortgages, with 56% of eligible loans deemed affordable to low- and moderate-income families. It enabled 375,000 first-time buyers to purchase a home. Freddie Mac also financed 447,000 rental units, with 92% of eligible units labeled as affordable to low- and moderate-income families.
Its income reached $2.9 billion in Q4 2023, an increase of 65% compared to QR 2022. And net revenues rose by 11% year over year to $5.4 billion.
New business activity reached $73 billion, marking a 3% decrease compared to 2022. Home purchase and refinance activity was impacted by higher interest rates, the report stated, reflecting challenges in the broader housing market.
Full-year 2023 activity also dropped sharply by 45% to $300 billion, the report noted.
“In 2023, Freddie Mac delivered on its mission, achieved solid financial results, and meaningfully increased its net worth,” Michael J. DeVito, CEO of Freddie Mac, said in a statement accompanying the report.
“The company helped more than 1.4 million families buy, refinance, or rent a home, and worked with lenders to reach more borrowers in underserved areas.”
DeVito also explained that the GSE set a new milestone by financing “a higher proportion of loans for first-time homebuyers than in any year since we started tracking that statistic three decades ago.”
