Fannie Mae and Freddie Mac Price Targets Cut
Analysts lowered valuations as potential privatization of the mortgage giants appears increasingly unlikely.
Updated on Sept. 28, 2026 in Residential
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Keefe Bruyette slashed price targets for Fannie Mae and Freddie Mac after shares for both entities plummeted throughout September 2026. This adjustment reflects growing market skepticism regarding the government’s efforts to return the mortgage giants to private ownership.
Why it matters
The shift in outlook underscores ongoing uncertainty for shareholders who have seen both stocks decline by nearly 60% this year. Potential privatization efforts, revived in 2025, now face significant headwinds that influence institutional valuations of these housing finance pillars.
Fannie Mae shares fell by more than 23% in September 2026, while Freddie Mac shares dropped by 25% during the same period. For the year to date, both companies have seen their stock values decline by approximately 57% to 60%.
The players
Keefe Bruyette
An investment firm that provides research and analysis on financial services companies.
Fannie Mae
A government-sponsored enterprise that supports the U.S. housing market by providing liquidity to lenders.
Freddie Mac
A government-sponsored enterprise that facilitates home ownership by purchasing mortgages from lenders.
President Trump
The current President of the United States overseeing federal policy regarding the privatization of mortgage finance entities.
Treasury Department
The federal agency that currently holds senior preferred shares in the mortgage entities.
The details
Keefe Bruyette issued the lower targets due to the diminished likelihood of a successful privatization of the two mortgage entities. The valuation model accounts for the risk of shareholder dilution should the senior preferred shares currently held by the Treasury Department be converted to common stock. Analysts still project robust earnings for both firms, but these fundamental strengths are currently outweighed by the structural uncertainty surrounding their long-term ownership status.
Timeline
January 2026: Freddie Mac stock experienced a significant prior decline.
June 2026: President Trump noted that an IPO for the firms remained a possibility.
September 2026: Shares for both companies declined sharply.
Money Landscape
The downgrade reflects a cooling of expectations surrounding the Trump administration's 2025 privatization effort. Market sentiment has shifted significantly since earlier in the year when the government-led transition to private ownership was viewed as a more achievable outcome.
Investors holding shares in these entities should monitor how potential Treasury Department stock conversions affect equity value. Because these investments carry high regulatory risk, consult with a professional financial advisor to assess how these shifts align with your broader portfolio goals.
The takeaway
The latest analyst action signals that the path toward privatizing major mortgage entities remains highly uncertain and volatile. Shareholders should review their risk tolerance and keep a close watch on future Treasury Department announcements regarding equity holdings.
Further reading
For more on the housing finance sector, explore our Residential coverage.
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