Mortgage investor Freddie Mac posted yearly declines in third-quarter net income and net revenues, with net revenues shrinking on a quarterly basis as well.

Third-quarter net income of $2.77 billion rose 16% from the $2.39 billion recorded during the second quarter but slid 11% from the $3.1 billion recorded a year ago.

In a Thursday press release announcing the earnings, the company attributed the annual decline to “a credit reserve build in the current period compared to a credit reserve release in the prior year period.”

Third-quarter net revenues of $5.74 billion were down 3% from second-quarter net revenues of $5.92 billion, and down 1.7% from $5.8 billion a year ago, driven by lower noninterest income, but partially offset by higher net interest income, the company said.

Net interest income for the third quarter was $5.46 billion across Freddie’s single-family and multifamily business, a 9.2% rise from last year. Freddie reported providing $124 billion in market liquidity with approximately 483,000 homes and rental units financed.

Fannie Mae and Freddie Mac are government-sponsored enterprises, regulated by the Federal Housing Finance Agency (FHFA). The firms channel liquidity to the U.S. housing market by acquiring and securitizing residential and commercial mortgages for purchase by investors.

Fannie announced disappointing third-quarter earnings on Wednesday, also posting annual declines in net income and net revenues that missed analysts’ estimates.

FHFA director and chairman of Freddie Mac’s board of directors, Bill Pulte, who assumed the roles in March, said in the press release announcing Fannie’s earnings that the company is “operating with greater business focus than ever.”

Commenting on Freddie’s third-quarter earnings in an announcement released Thursday, Pulte said the U.S. housing market “needs more supply, and we are looking closely at ways to help drive more home building in both the multifamily and single-family markets.”

Freddie’s total mortgage portfolio grew to roughly $3.6 trillion, comprising $3.14 trillion in outstanding single-family loan balances and $480 billion in multifamily balances.

Earnings per share was $0.00 for the quarter, an improvement from a loss of $0.01 per share in the previous quarter and a loss of $0.02 per share a year ago.

New single-family mortgage acquisitions rose seasonally in the third quarter to $99 billion from $94 billion in the second quarter, exceeding $98 billion in acquisitions a year ago. Purchases comprised $81 billion of Freddie’s new business activity in the third quarter, while refinances made up $18 billion.

However, third-quarter net income and revenues fell on a yearly basis across Freddie’s single-family segment, though third-quarter net interest income of $5.05 billion was an 8% increase from last year.

Single-family net income of $2.34 billion was 8.9% lower than the $2.57 billion recorded in the third quarter of 2024, though nearly 12% higher than $2.09 billion the previous quarter.

Single-family net revenues of $4.9 billion were 3.1% lower than last year’s $5.06 billion and approximately 4.5% lower the previous quarter’s $5.13 billion.

The share of third-quarter new business activity that supported first-time homebuyers shrank to 50% from 53% in the second quarter and 51% a year ago.

The share of financing activity supporting loans affordable for low- to moderate-income families rose to 54% from 53% in the previous quarter and 51% a year ago.

The weighted-average original loan-to-value (LTV) ratio on new acquisitions remained flat quarterly and annually at 77%, while the weighted-average original credit score was one point higher than a year ago but three points lower than the second quarter at 756.

Across Freddie’s entire single-family mortgage portfolio, loan count (13.9 million), weighted-average credit score (754), LTV (53) and average estimate guarantee fee (50 basis points) all remained essentially flat on a quarterly and annual basis.

The serious delinquency rate crept up slightly across Freddie’s single-family portfolio to 0.57% in the third quarter, up from 0.55% the previous quarter and 0.54% a year ago.

Freddie’s chief financial officer, Jim Whittinger, said during an earnings call that the company had revised its 24-month home price forecast to reflect expectations of accelerated cooling in the near term.

The firm expects national home price appreciation of just 0.7% over the next 12 months, compared to a previous estimate of 1.3%, with 0.9% appreciation over the ensuing 12-month period, compared to earlier forecasts of 0.4%.