MCLEAN, Va. - Freddie Mac (OTCQB: FMCC (OTC:FMCC)) announced today that the 30-year fixed-rate mortgage (FRM) has seen an increase, now averaging 6.95 percent. This figure is up from the previous week's average of 6.86 percent. The report, which includes an adjustment for Independence Day, also noted a rise in the 15-year FRM to 6.25 percent from 6.16 percent last week.
Despite the recent uptick, Freddie Mac's Chief Economist, Sam Khater, anticipates a potential decrease in rates in the latter half of the year. Khater also observed a decline in new home and pending home sales, resulting in a growth of active listings. He suggests that the additional inventory, coupled with the expected moderation of rates, could lead to slower price growth, which may benefit prospective homebuyers.
A year ago, the 30-year FRM stood slightly lower at 6.81 percent, while the 15-year FRM was nearly the same at 6.24 percent. The Primary Mortgage Market Survey® (PMMS®) focuses on conventional, conforming, fully amortizing home purchase loans for borrowers with excellent credit who can afford a 20 percent down payment.
Freddie Mac, established in 1970, has a longstanding mission to make housing attainable for families throughout the United States, promoting liquidity, stability, affordability, and equity in the housing market across various economic conditions. The organization has assisted tens of millions of families in purchasing, renting, or maintaining their homes over the decades.
This information is based on a press release statement from Freddie Mac. The full details of the PMMS and its methodology are available through Freddie Mac's official channels.
In other recent news, Freddie Mac has reported a series of notable changes in the 30-year fixed-rate mortgage rates. The rates have been fluctuating, with a significant drop below 7% for the first time since early April, averaging at 6.94%. Still, these rates have also seen a consecutive increase for five weeks, reaching an average of 7.22%, before stabilizing around 6.82%.
Freddie Mac's Chief Economist, Sam Khater, attributes these rate adjustments to data indicating a slowdown in economic growth. Despite signs of decreasing inflation rates, Khater does not anticipate a significant drop in mortgage rates in the near future. He notes an improvement in housing inventory, which could potentially moderate the growth of home prices.
In a major development, Freddie Mac has announced its plan to voluntarily delist its last security traded on the New York Stock Exchange. This decision is attributed to the unnecessary burden of compliance with NYSE rules and administration, considering Freddie Mac's current status under government conservatorship. The organization has been under this conservatorship since the 2008 financial crisis, which allows for more direct government oversight and control.
These are recent developments based on data from Freddie Mac's Primary Mortgage Market Survey, which tracks conventional, conforming home purchase loans for borrowers who place a 20 percent down payment and possess excellent credit. These changes in mortgage rates and the delisting are significant to potential homebuyers and the broader economy, influencing consumer spending and the construction industry.
InvestingPro Insights
As Freddie Mac (OTCQB: FMCC) continues to navigate the fluctuating mortgage landscape, investors are closely monitoring the company's financial health and market position. The latest data from InvestingPro reveals a market capitalization of $4.09 billion, indicating a significant presence in the financial services industry. Despite a negative P/E ratio of -281.85, reflecting challenges in recent profitability, the adjusted P/E ratio for the last twelve months as of Q1 2024 improves to -46.8. This suggests a potential shift in the company's earnings trajectory.
InvestingPro Tips highlight that Freddie Mac is expected to see net income growth this year, which aligns with the organization's mission to support the housing market. Moreover, the company's stock has experienced a substantial return of 199.43% over the past year, signaling strong investor confidence. It is worth noting that the stock is known for high price volatility, which could present opportunities for investors with a robust risk management strategy.
For those interested in exploring more about Freddie Mac's financials and market performance, InvestingPro offers additional insights. With a total of 9 InvestingPro Tips available, including observations on the company's liquidity and profitability, investors can gain a more comprehensive understanding of FMCC's potential. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription for access to these valuable insights.
Revenue growth has also been strong for Freddie Mac, with a 35.37% increase in the last twelve months as of Q1 2024. This growth, coupled with the company's solid operating income margin of 60.89%, could be a harbinger of financial stability and profitability in the near term. As the housing market continues to evolve, Freddie Mac's role and performance will remain of keen interest to investors, homebuyers, and industry analysts alike.
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