Freddie Mac Cuts 12-Month Home-Price Growth Forecast to 1.3%

Freddie Mac lowered its forecast for house-price growth over the next 12 months to 1.3% from 1.7% in its prior outlook, as third-quarter net income rose 17% from a year earlier to $3.235 billion.

The company now projects a 1.5% increase over the subsequent 12 months, down from 2.1% in its second-quarter outlook. The revisions cut the expected growth rates by 0.4 and 0.6 percentage points, respectively. The two forecasts cover consecutive 12-month periods. Both still project rising prices, but at a slower pace than the previous outlook.

House prices increased 0.5% in the third quarter, compared with a 0.2% gain in the year-earlier quarter. James Whitlinger, Freddie Mac’s executive vice president and chief financial officer, said in prepared remarks: “Mortgage rates ended the quarter at 7.03 percent, the highest level since the beginning of the year, continuing to weigh on market activity.”

Net income was $3.235 billion for the quarter ended Sept. 30, compared with $2.773 billion in the third quarter of 2025 and $3.838 billion in the second quarter. The latest figure was $462 million higher year over year and $603 million lower quarter over quarter. Net revenue rose 19% year over year to $6.810 billion, while earnings per share were $0.01 in the company’s third-quarter revenue and earnings-per-share results.

Freddie Mac recorded an $800 million provision for credit losses, up from $175 million in the year-earlier quarter. Whitlinger attributed the reserve build to higher projected future mortgage rates and new acquisitions.

Freddie Mac operates in the secondary mortgage market. It buys conforming mortgages from approved lenders and securitizes them for investors, providing liquidity to the housing market. The company does not lend directly to homebuyers.