Freddie Mac Shares Surge on Privatization Speculation

Freddie Mac, the U.S. mortgage finance giant, finds itself at a potential historic inflection point. A surprising declaration from Washington has injected fresh momentum into the company's stock, coinciding with mortgage rates hitting their lowest point this year. Market participants are now questioning whether the government-controlled entity could re-enter public markets before the year concludes.

Beyond daily economic fluctuations, a remarkable statement has fueled investor optimism. Bill Pulte, Director of the Federal Housing Finance Agency, suggested on October 21, 2025, that Freddie Mac could potentially return to private ownership within the current year. Reports indicate that President Trump is allegedly reviewing a corresponding public offering. Such a structural shift would fundamentally alter the corporation's long-term framework and could significantly rekindle market interest.

Mortgage Rates Descend to Multi-Month Lows

The American housing sector is witnessing a notable transformation. Interest rates for the benchmark 30-year fixed mortgage have declined to 6.19%, marking the most favorable level in over twelve months. This persistent downward trajectory, continuing since the start of the year, has initiated a powerful refinancing wave that shows no sign of abatement after six consecutive weeks. Currently, more than 50% of all mortgage applications are for refinancing purposes. Concurrently, the rate for 15-year home loans also decreased, settling at 5.44%. For a central player like Freddie Mac in the U.S. mortgage landscape, these developments represent potentially positive indicators.

Should investors sell immediately? Or is it worth buying Federal Home Loan Mortgage?

Economic Headwinds Create a Complex Backdrop

However, this encouraging interest rate environment possesses a contrasting dimension: it reflects increasing concerns about the nation's economic health. Persistent trade disputes, a strained labor market, and partial government operational disruptions are clouding the economic outlook. The absence of recent economic data concerning construction activity and industrial production further complicates accurate situation assessment. Although initial jobless claims have recently decreased, nearly 1.9 million individuals continue to receive unemployment benefits—the highest number recorded since November 2021. Upcoming inflation data are anticipated to be crucial for determining the future monetary policy direction of the U.S. Federal Reserve.

Valuation Presents a Divergent Picture

Despite reporting consistent losses and experiencing frequent management turnover, several market analysts currently perceive Freddie Mac as undervalued. The spectrum of fair-value estimations, however, reveals substantial disparity, ranging from just above $11 to over $77 per share. This wide range underscores the significant uncertainty embedded in the company's valuation. Could the mortgage titan be approaching its most substantial transformation since the financial crisis?