Freddie Mac has recently been in the news due to rising mortgage rates, which have reached their highest levels since late November 2023. This increase in borrowing costs has significantly impacted homebuyers, pushing many to the sidelines during a traditionally busy housing market. Experts predict that mortgage rates will remain above 6%, contributing to a decline in housing affordability across the U.S. and other nations, as highlighted by IMF data. The current economic climate, characterized by soaring yields on government bonds and a strong dollar, has further complicated the housing landscape.
The Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, is a public government-sponsored enterprise (GSE) established in 1970 to enhance the liquidity and stability of the U.S. housing market. Headquartered in Tysons Corner, Virginia, Freddie Mac plays a crucial role in the mortgage market by purchasing loans from lenders, thereby providing them with capital to issue more mortgages. This process helps to lower borrowing costs for consumers and promotes homeownership. Freddie Mac is also known for its involvement in the secondary mortgage market, where it securitizes loans into mortgage-backed securities.