Fannie Mae's 2024 Earnings: A Deep Dive into Single-Family and Multifamily Segments

As an investor, keeping a close eye on the performance of key players in the mortgage market is crucial. Fannie Mae, a government-sponsored enterprise (GSE), recently reported its financial results for the fourth quarter and full year of 2024. Let's delve into the earnings call and explore the performance of the single-family and multifamily segments, as well as the outlook for 2025.

Single-Family Segment Performance in 2024

Fannie Mae's single-family segment reported net income of $14.4 billion in 2024, a decrease of $425 million compared to 2023. Despite the slight decrease, the segment's performance remained robust, with a 3% annual increase in single-family acquisition volume. The company acquired approximately 778,000 single-family purchase loans totaling $326 billion, with roughly half being for first-time homebuyers. Additionally, Fannie Mae refinanced approximately 204,000 single-family loans.

The credit profile of Fannie's overall single-family book posted 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 benefit for credit losses was $938 million.

Multifamily Segment Performance in 2024

Fannie Mae's multifamily segment reported net income of $2.5 billion in 2024, consistent with 2023. The company acquired approximately $55 billion in multifamily loans last year, up 4% from 2023. Fannie Mae financed approximately 420,000 units of multifamily rental housing in 2024, with most of these units being affordable for households earning at or below 120% of the area median income (AMI).

The multifamily provision increased by $257 million to $752 million due to an incremental decline in property values, rising delinquencies, and the ongoing investigation of lending transactions with suspected fraud. Fannie Mae expects multifamily property values to stabilize in 2025.



Outlook for 2025

Fannie Mae anticipates the following for the single-family segment in 2025:

* Existing-home sales to total 4.15 million units, an improvement over the approximately 4 million units in 2024, but still down more than 20% compared to 2019.
* New-home sales to strengthen throughout 2025 for an annualized sales pace of 738,000 units.
* Year-over-year home-price growth to be 3.5% in 2025 compared to 5.8% in 2024.
* Single-family mortgage originations to total about $1.9 trillion in 2025, up from an estimated $1.7 trillion in 2024, with purchase loans making up 74% of single-family originations.

For the multifamily segment in 2025, Fannie Mae forecasts:

* Multifamily rent growth to be in the 2% to 2.5% range.
* Vacancy rates to be between 6% and 6.25%.
* Multifamily mortgage originations of $330 billion to $375 billion in 2025.

As an investor, understanding the performance and outlook of key mortgage market players like Fannie Mae is essential for making informed decisions. The company's commitment to supporting first-time homebuyers and affordable rental housing, as well as its strategic acquisitions and organic growth initiatives, position it well for continued success in the mortgage market. Keep an eye on Fannie Mae's earnings and market trends to stay ahead of the curve in your investment portfolio.