Fannie and Freddie stocks tumble 12% as IPO hopes fade

Shares of Fannie Mae and Freddie Mac tumbled approximately 12% on Friday, extending their multi-day losing streaks as investors grew increasingly concerned about the mortgage giants’ path out of government conservatorship.

The shares have now plummeted more than 40% from their September peaks, though they remain up over 60% compared to a year ago.

The selloff comes amid mounting uncertainty about President Donald Trump’s housing policy moves and their potential impact on the long-anticipated release of the mortgage-finance companies from government control. Investors have been assessing Trump’s recent directive for Fannie and Freddie to purchase $200 billion in mortgage bonds, which he framed as an effort to reduce housing costs.

Market participants are also speculating about potential housing-related announcements that could come during the president’s appearance at the World Economic Forum in Davos, Switzerland next week.

The mortgage giants had seen significant gains in 2025 driven by optimism surrounding a possible initial public offering. Investor enthusiasm peaked in August following reports that the administration was considering an IPO that could value the enterprises at approximately $500 billion, with plans to sell 5% to 15% of their stock to raise about $30 billion.

However, recent policy proposals and comments suggesting an offering isn’t imminent have dampened investor confidence in the near-term privatization prospects for the companies, which have remained under Washington’s control since the 2008 financial crisis.

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