Freddie Mac shares fell by 8.7% over the past five trading sessions after the White House signaled that the government might retain control of the company rather than pursue a public offering. Investors reacted to Treasury Secretary Janet Yellen’s proposal to shift the company’s funding mechanism from senior preferred stock dividends to a mortgage-backed securities (MBS) fee, which would channel profits directly to the U.S. Treasury. Market participants estimate that the fee could reduce Freddie Mac’s annual net income by approximately $750 million, raising concerns about dividend cuts and constraining the company’s future capital reserves.

Freddie Mac reported that its January 15 PMMS® showed the 30-year fixed-rate mortgage averaged 6.06%, down from 6.16% the previous week and well below last year’s 7.04%. The 15-year fixed rate also declined to 5.38% from 5.46% a week earlier, compared with 6.27% one year ago. Chief Economist Sam Khater noted that weekly purchase applications jumped by 12% and refinance requests surged 15% after rate declines, signaling renewed buyer interest and potential for a strong spring sales season. These figures underscore Freddie Mac’s role in promoting affordability by improving market liquidity and expanding access to low-cost financing.

Freddie Mac’s mission remains focused on stabilizing the housing market and enabling homeownership, but policy shifts could alter its capital framework. The proposed MBS fee structure would align Freddie Mac’s revenue more closely with market volumes rather than fixed dividend payments, potentially increasing earnings volatility during rate swings. Analysts now project a 10% reduction in the company’s return on equity over the next two years if the fee is set at 12 basis points. Management has signaled readiness to adjust its risk-based capital buffer ahead of the Federal Housing Finance Agency’s upcoming rulemaking in Q2 2026.