Fannie Mae’s earnings jumped to $7.2B in Q2 2021. This earnings jump represented a near-tripling of its earnings on an annual basis.
Fannie Mae Posts Earnings of $7.2B in Q2 2021
The GSE (government-sponsored enterprise) Fannie Mae posted an earnings jump to $7.2B in Q2 2021, nearly three-times its earnings in Q2 2020.
This eye-popping earnings jump was driven by credit-related income as single-family purchase loan acquisitions soared to a new high of $129.5B in Q2 2021.
Fannie’s net income increased from $2.55B last year in this same time period. In Q1 2021, Fannie earned $5B.
Fannie’s Net Worth Hit $37.3B in Q2 2021
Fannie Mae’s net worth jumped to $37.3B in Q2 2021 from $16.5B in Q2 2020 and from $30.2B in Q1 2020.
Its net revenues increased to $8.4B from almost $5.9B a year ago and $6.8B during the previous fiscal period. Q2 2021 purchase loan acquisitions jumped from $92B in Q2 2020 and from $99B in Q1 2021.
Clearly, Fannie’s record purchase volume underlines a change in the housing market from one year ago when refinancing volume dominated this GSE. (Refinancing volume last year at this time hit a high that hadn’t been seen since 2003.) In this current housing market, refinances remain dominant in Fannie’s acquisition operations but they did fall y/y to $244B from $259B and from $301B in Q1 2021.
Fannie’s Earnings Similar to Freddie Mac’s Earnings
During Q2 2021 Freddie Mac’s net income jumped to $3.7B from $1.8B in Q2 2020 and from $2.8B in Q1 2021. Freddie’s net worth soared +96% y/y to $22.4B and jumped +19% from Q1 2021.
Affordability Challenges in Current Market
Though high purchase prices spurred Fannie Mae’s earnings results in Q2 2021, these high prices also present potential buyers with affordability challenges. Hugh Frater, CEO of Fannie Mae, acknowledged these challenges in an earnings call by saying, “We recognize that the housing market…is not serving the needs of everyone. We need to change that…” Meanwhile, home prices continue soaring at more than twice the rate of incomes.
Frater said that approximately 50% of Fannie’s purchase volume went to first-time buyers during Q2 2021.
Thanks to National Mortgage News.
