Fannie Mae

Good day and welcome to the Fannie Mae Second Quarter 2024 Financial Results Conference Call. At this time, I will now turn it over to your host, Pete Backell, Fannie Mae's Director of External Communications.

Hello, and thank you all for joining today's conference call to discuss Fannie Mae's Second Quarter 2024 Financial Results. Please note this call includes forward-looking statements, including statements about Fannie Mae's expectations related to economic and housing market conditions, the future performance of the company's book of business, and the company's business plans and their impact. Future events may turn out to be very different from these statements. The forward-looking statements section in the company's second quarter 2024 Form 10-Q filed today And in the risk factors and forward-looking statement sections in the company's 2023 Form 10-K, filed on February 15, 2024, describe factors that may lead to different results. A recording of this call may be posted on the company's website. We ask that you do not record this call for public broadcast and that you do not publish any full transcript. I'd now like to turn the call over to Sani Mae President and Chief Executive Officer Priscilla Almodovar and Fannie Mae Chief Financial Officer, Krissa C. Haley.

Welcome, and thank you for joining us. I'll start by spending a few minutes on the economic environment before speaking to our financial and mission performance for the second quarter of 2024. After that, our Chief Financial Officer, Krissa Haley, will discuss our quarter results in more detail. Now turning to the economy. While inflation slowed in the second quarter, a higher for longer interest rate environment continued as the Fed has made clear that incoming data will determine the pace of rate cuts. The 30-year fixed rate mortgage rate averaged 7% during the quarter, and we estimate that home prices increased 3% during the quarter and 5.2% since the start of the year. Affordability concerns, together with a low inventory of homes for sale, continue to limit the number of buyers willing and able to buy a home, even as listings have begun to rise. You can see this in our July home purchase sentiment index, where only 19% of consumers say that it's a good time to buy a home. In many parts of the country, affordability remained a challenge for renters too. Nationally, we estimate rents grew about 100 basis points in the second quarter. compared to 25 basis points in the first quarter. Our economists expect that similar affordability challenges will persist for the remainder of the year. Now, turning to our second quarter financial results, we reported $4.5 billion in net income compared to $4.3 billion in the first quarter. As a result, we continue to reduce our capital shortfall and build our net worth. Our net worth reached $86.5 billion, further strengthening our financial stability. We provided $95 billion of liquidity to the single-family and multi-family markets in the second quarter. This helped 330,000 households buy, refinance, or rent a home. This included approximately 72,000 units of multi-family rental housing a significant majority of which were affordable to households earning at or below 120% of area median income. We also helped 108,000 first-time homebuyers to buy a home. I'm proud of this work and our many efforts to advance the nation's housing market. This includes publishing informative research and insights. For example, we recently refreshed our Mortgage Understanding Study, last completed in 2018. Today's market is very different and tougher for homebuyers. Our study shines a light on consumers' thoughts about homebuying, what they know about today's mortgage process, and misconceptions they may have. Two key findings are, one, while the percentage of consumers who feel it is a good time to buy a home is historically low, the dream of homeownership remains high. And two, the knowledge of what it takes to qualify for a mortgage is mixed. This is a call to action for all of us to continue to work together to make the mortgage process clearer, simpler, and smarter, and to further support consumers in their path to homeownership through outreach and innovation. That's why Fannie Mae continues to innovate to reduce key obstacles that many consumers face, such as limited credit history, and high upfront costs. In addition, we continue to advance innovative ways to connect global capital to U.S. housing. In the first half of this year, we issued over $5 billion in single-family social bonds and over $4 billion in multifamily social bonds. These bonds help mortgage-backed security investors allocate their capital in support of affordable housing, and underserved borrowers and markets. I encourage you to learn more about our work, which is detailed in our 2023 Corporate Responsibility and Impact Report we released earlier this month. Our actions to provide liquidity, stability, and affordability to the U.S. housing market are grounded in our mission and made stronger by our focus on risk and controls. and our improved financial stability enables us to be a reliable source of mortgage credit for America's homeowners and renters. Before I turn it to Krissa, I want to thank my colleagues across Fannie Mae who come to work every day with a shared commitment to our mission. Now Krissa will address our quarter two results in more detail.