Freddie Mac Shares Tumble Despite Quarterly Profit

In a surprising market move, shares of mortgage finance giant Freddie Mac plummeted approximately 12% during Wednesday's trading session. This sharp decline occurred even as the company reported solid profitability, with third-quarter 2025 net earnings reaching $2.8 billion.

While Freddie Mac's $2.8 billion quarterly profit appears substantial, it represents an 11% decrease compared to the same period last year. This earnings contraction stems partially from the company's decision to bolster its credit loss reserves. The mortgage portfolio saw moderate expansion, climbing to $3.62 trillion, while credit quality for new single-family home loans remains robust.

• Q3 2025 Net Earnings: $2.8 billion
• Year-over-Year Change: -11%
• Total Mortgage Portfolio: $3.62 trillion (+2%)

Housing Sector Headwinds Emerge

The broader U.S. housing market is displaying signs of strain that are impacting the entire industry. Current average rates for 30-year fixed mortgages hover between 6.12% and 6.22%, hovering near annual lows but remaining elevated by historical standards. This high-cost environment is contributing to buyer hesitation amid economic uncertainty.

Recent market data reveals pending home sales declined by 0.3% in the four weeks ending November 9th, marking the first drop observed in four months. Properties are also spending more time on the market, creating additional pressure for real estate-related businesses.

Should investors sell immediately? Or is it worth buying Freddie Mac?

Regulatory Landscape in Flux

Freddie Mac's strategic direction is increasingly influenced by policy developments. The Federal Housing Finance Agency (FHFA) is currently evaluating the potential for "portable mortgages," which would enable homeowners to transfer their existing interest rate to a new property. Concurrently, initiatives aimed at expanding credit access are being advanced.

In a significant policy shift, Fannie Mae recently eliminated its minimum credit score requirement of 620 points—a move Freddie Mac had already implemented. These measures are designed to facilitate loan access for a broader range of Americans, including those with limited credit history.

Mixed Sentiment Among Market Experts

Analyst perspectives on Freddie Mac remain divided. The consensus rating currently stands at "Hold," but price targets display extraordinary variation, ranging from $11.94 to $119.49 per share. This wide dispersion underscores the substantial political and regulatory uncertainties facing the company, factors that cause its stock to trade more like a policy speculation vehicle than a conventional financial equity.