FANNIE MAE - FNMA STOCK NEWS

The Fannie Mae Economic and Strategic Research (ESR) Group reports continued affordability constraints in the housing market, leading to a downgrade in the 2024 home sales forecast to 4.82 million, a 1.3% annual gain, lower than the previous 2.8% projection. Despite an increase in home listings, sales remain weaker than expected due to the 'lock-in effect' and recalibrated mortgage rate expectations. The ESR Group also downgraded the 2024 GDP growth outlook to 1.6% due to revisions in Q1 GDP data and slowing income and spending growth. The Federal Reserve is now expected to cut rates only once, in December, given the need for sustained cooling inflation. The unemployment rate has risen to 4%, indicating a gradual labor market slowdown. The ESR Group believes housing market activity will remain subdued without significant improvements in income growth, home price appreciation, or mortgage rate declines.

Fannie Mae (FNMA) has completed its fourth Credit Insurance Risk Transfer (CIRT) transaction of 2024, known as CIRT 2024-H2, transferring $284.8 million of mortgage credit risk to private insurers and reinsurers. The covered loan pool includes approximately 34,000 single-family mortgage loans with an unpaid principal balance (UPB) of $12.1 billion, featuring loan-to-value (LTV) ratios between 80.01% and 97%. These loans were acquired between May and September 2023 and are fixed-rate, 30-year term, fully amortizing mortgages underwritten with stringent credit standards.

The transaction, effective April 1, 2024, retains risk for the first 185 basis points of loss on the $12.1 billion loan pool. If this retention layer is exhausted, 25 insurers and reinsurers will cover the next 235 basis points of loss, up to $284.8 million. Coverage lasts for 18 years, with potential reductions based on loan paydowns and delinquencies. Fannie Mae may cancel coverage after five years by paying a fee. To date, Fannie Mae has acquired $27.2 billion in insurance coverage on $913.4 billion of single-family loans through the CIRT program.

The Fannie Mae Home Purchase Sentiment Index® (HPSI) dropped 2.5 points in May, reaching 69.4. This decline marks a new survey low for consumer attitudes toward homebuying conditions, with only 14% of respondents deeming it a good time to buy a home, down from 20% last month. Similarly, those believing it's a good time to sell fell from 67% to 64%. Despite this, household income perceptions improved, with 20% of respondents reporting higher incomes than a year ago. Consumer sentiment reflects frustration over unaffordability, with expectations that home prices and mortgage rates will rise in the near future. The HPSI is up 3.8 points year over year.

Fannie Mae (OTCQB: FNMA) announced surpassing $3 billion in single-family labeled social bond issuances. This is facilitated by the new Social Indicator, which helps investors identify mortgage-backed securities (MBS) issued since March 1, 2024, under Fannie Mae's Single-Family Social Bond Framework.

The platform enhancements, including PoolTalk® and Data Dynamics®, enable investors to track over $3.6 billion in issued social bonds and future issuances. Monthly issuances of over $600 million in Social MBS attract investors both with and without a social objective.

These bonds support populations facing barriers to affordable housing and credit access, aligning with global standards and validated by a Second Party Opinion. Annual impact reports will also be provided to detail the social impacts of these investments.

The Q2 2024 Fannie Mae Home Price Expectations Survey (HPES) forecasts a slowdown in home price growth for 2024 and 2025, with expected increases of 4.3% and 3.2%, respectively, compared to 6.6% in 2023.

The survey, produced in partnership with Pulsenomics, , gathers insights from over 100 housing and mortgage experts.

Notably, the anticipated 30-year fixed mortgage rate for 2024 is projected to be 6.6%, up from a prior estimate of 5.9%.

Despite higher mortgage rates, for-sale home listings are trending upward, with 84% of respondents attributing this to a diminishing 'lock-in effect.'

However, ongoing affordability challenges could slow the conversion of listings to actual sales.

Experts see a potential easing in the housing affordability crisis but note that significant price surges since 2020 pose challenges for prospective homeowners.

Fannie Mae has released its April 2024 Monthly Summary, offering insights into its gross mortgage portfolio, mortgage-backed securities, other guarantees, interest rate risk measures, and serious delinquency rates. This summary provides data on monthly and year-to-date activities, allowing stakeholders to gauge performance and risk metrics.

Fannie Mae (OTCQB: FNMA) has priced its fourth Connecticut Avenue Securities® (CAS) REMIC® transaction of 2024, raising approximately $708 million. This brings the year-to-date total issued notes under the CAS program to about $2.9 billion. The reference pool for CAS Series 2024-R04 includes around 54,000 single-family mortgage loans with an unpaid principal balance of $18.6 billion. These mortgages have loan-to-value ratios between 60.01% and 80.00% and were acquired between July and September 2023. Fannie Mae will retain portions of several tranches, including the first-loss tranches, and plans to introduce the A-1 class programmatically. The transaction includes robust investor demand and high ratings across multiple tranches. Nomura and BofA Securities lead the transaction, with additional co-managers and selling group members. With this deal, Fannie Mae has completed 65 CAS transactions, issuing over $67 billion in notes and transferring credit risk on over $2.2 trillion in single-family mortgage loans.

Fannie Mae (OTCQB: FNMA) has announced GITSIT Solutions, as the winning bidder for its twenty-fourth Community Impact Pool (CIP) of non-performing loans. This transaction, expected to close on July 24, 2024, involves 51 deeply delinquent loans with a total unpaid principal balance (UPB) of $14.3 million. The loans, primarily located in the New York area, have an average loan size of $279,812 and a weighted average note rate of 4.35%. The cover bid was 86.20% of UPB. Purchasers must honor existing loss mitigation efforts and offer further options to delinquent borrowers before initiating foreclosure.

The Fannie Mae Economic and Strategic Research (ESR) Group projects a modest slowdown in housing activity through 2024 due to sustained high mortgage rates, expected to hover around 7% by year-end. However, a sharp decline in home sales is unlikely as active listings have increased by 30% year-over-year.

Despite unchanged GDP growth forecasts at 1.8% for 2024, household income growth lags behind consumer spending, suggesting future consumption may decline. Inflation is expected to decelerate, preventing a Federal Reserve rate hike until September. The ESR Group forecasts a gradual improvement in home sales but notes that a significant change is unlikely until mortgage rates decrease, potentially in 2025.