Fannie Mae (FNMA) Stock in 2025: Michael Burry’s Big Bet, IPO Hopes and Housing Market Risks

Published: December 6, 2025 — data as of market close on December 5, 2025

Where Federal National Mortgage Association (Fannie Mae) stock stands today

Federal National Mortgage Association (“Fannie Mae”, OTCMKTS: FNMA) has turned into one of 2025’s most closely watched financial stocks. After trading below $3 just a year ago, FNMA now sits around $11.2 per share, giving it a market capitalization of roughly $64 billion. Over the past 12 months, the stock has surged more than 380%, while its 52‑week range runs from about $2.24 to nearly $16, underlining how volatile the ride has been. ^[1]

Short‑term price action has cooled slightly. On Friday, December 5, FNMA closed near $11.25, down a little over 2% on the day. Yet over the last two weeks the stock is still up more than 17%, and technical analysts at StockInvest now classify it as a “Hold/Accumulate” candidate after downgrading it from “Buy” following the recent pullback. They highlight high daily volatility, with typical intraday swings above 6%, and expect a wide possible trading range in coming sessions. ^[2]

For investors, that combination of explosive long‑term gains and sharp short‑term swings makes Fannie Mae stock both high‑beta opportunity and high‑risk speculation, rather than a sleepy income play.

Why FNMA is suddenly back in the headlines

Several powerful storylines are converging around Fannie Mae stock as of early December 2025:

Michael Burry’s big, public bet
Michael Burry — the “Big Short” investor famous for betting against the U.S. housing market before the 2008 crisis — has revealed that Fannie Mae is one of his top long ideas. In a recent Substack post, he named FNMA alongside Lululemon, Molina Healthcare and Shift4 Payments as multi‑year holdings he is prepared to own for at least 3–5 years, calling them “low‑priced buy” opportunities in the $2–12 billion market‑cap range. ^[3] According to Barchart’s summary of his comments, FNMA is the only one of those four picks that is up year‑to‑date, with the stock having spiked over 250% in 2025 before pulling back roughly 38% from a recent high near $15.99. ^[4]
Speculation around the Trump administration’s privatization plans
Fannie Mae and its sibling Freddie Mac (FMCC) have been under federal conservatorship since the 2008 financial crisis. They required a combined $191 billion bailout and, in exchange, the government took effective control of roughly 80% of their equity. ^[5] Now, in President Donald Trump’s second administration, there is mounting speculation that the White House will finally move ahead with a stake sale / IPO‑style transaction that would begin to reduce the federal government’s ownership and put the mortgage giants on a roadmap out of conservatorship. Reporting summarized by Barchart suggests the administration has explored a deal that could value the two companies at over $500 billion combined, selling perhaps 5–15% of their shares and raising on the order of $30 billion, while the government stays the dominant shareholder. ^[6]
A tug‑of‑war between IPO optimism and warnings about timing
Wall Street views on the timing and structure of any Fannie/Freddie offering are far from uniform. Some reporting and commentary from investors such as Bill Ackman argue that, while privatization may ultimately happen, the IPO is “far from ready” and will require significant time and careful execution, especially around capital requirements and the treatment of existing shareholders. ^[7] That tension—between near‑term hype and long implementation timelines—is a big reason FNMA trades like a policy‑sensitive speculative stock rather than a conventional financial blue chip.

Fundamentals: what Q3 2025 tells us about Fannie Mae’s business

Behind the political drama, Fannie Mae is still a gigantic, system‑critical mortgage finance machine.

In its third‑quarter 2025 results, Fannie Mae reported: ^[8]

Net income of $3.9 billion,
Up 16% versus Q2 2025,
But 5% lower year‑on‑year, mainly due to changes in credit loss provisions,
A guaranty book of business around $4.1 trillion,
Net revenues of $7.3 billion, roughly flat versus both the prior quarter and the same quarter a year earlier,
Shareholders’ net worth of $105.5 billion.

The company’s multifamily segment also reported Q3 2025 results on the same day, underscoring the breadth of Fannie’s role across single‑family and multifamily housing finance. ^[9]

At the same time, trailing twelve‑month data show Fannie Mae with about $28–31 billion in revenue but a net loss of roughly $2 billion, according to StockAnalysis, reflecting the impact of policy‑driven capital building and credit provisions. ^[10]

Key takeaway: operationally, Fannie Mae is still generating massive, relatively stable fee and interest income from a huge guaranty book, but earnings can swing with credit assumptions and capital policy — factors heavily influenced by regulators and the administration.

What Fannie Mae’s own economists expect for housing and mortgage rates

For FNMA stock, the macro backdrop—especially home sales, home prices and mortgage rates—is just as important as company‑specific news.

Fannie Mae’s Economic & Strategic Research (ESR) Group publishes regular forecasts on the U.S. economy and housing market. ^[11] Recent updates paint a picture of:

1. Cooling but still‑positive home price growth

The Fannie Mae Home Price Index shows U.S. single‑family home prices rising 4.1% from Q2 2024 to Q2 2025, down from 5.0% growth in the previous year‑over‑year reading. ^[12]

Slowing price gains suggest some easing of the intense affordability squeeze, but hardly a crash. For Fannie Mae, moderate appreciation combined with fewer speculative excesses may be healthier than either a boom or a bust.

2. Trimmed home sales outlook for 2025–2026

In August, industry coverage of Fannie Mae’s forecast revisions highlighted that the agency cut its expectations for total home sales (new and existing) to around 4.74 million units for 2025 and 5.23 million for 2026, down from prior projections of 4.85 million and 5.35 million respectively. ^[13]

By September, the ESR Group’s own “Economic Developments” commentary further revised the outlook slightly, with total home sales now projected at about 4.72 million in 2025 and 5.16 million in 2026. ^[14]

Lower transaction volumes mean fewer new mortgages to guarantee and securitize, but this can be partly offset by refinancing waves if interest rates fall.

3. Mortgage rate path: easing, but not back to the pandemic lows

Fannie Mae’s March 2025 housing forecast initially projected the average 30‑year fixed mortgage rate drifting from about 6.8% in early 2025 down to 6.3% by year‑end, then only modestly lower (around 6.2%) in 2026. ^[15]

More recent forecasts from September 2025 now estimate mortgage rates ending 2025 at 6.4% and 2026 at 5.9%. ^[16]

The ESR group also expects: ^[17]

Total home sales: ~4.72 million (2025) and ~5.16 million (2026),
Single‑family originations: about $1.85 trillion in 2025 and $2.32 trillion in 2026,
A rising refinance share (26% → 35%) as rates inch below 6%.

For Fannie Mae’s business model, this outlook suggests steady rather than explosive volume, with a potential lift from refis if rates fall enough to justify refinancing for homeowners who locked in higher rates in 2023–2024.

How analysts and models currently value Fannie Mae stock

Street targets cluster around the low‑teens

According to MarketBeat and other aggregated data, five sell‑side analysts currently cover Fannie Mae. Their 12‑month consensus rating is effectively “Hold”, with opinions ranging from “Strong Buy” to “Strong Sell.” The average price target sits around $12.9, with a high estimate near $20 and a low estimate close to $10. That implies roughly 11–15% upside from recent prices around $11.2. ^[18]

Barchart notes that Wedbush Securities recently double‑upgraded FNMA from “Underperform” to “Outperform” and hiked its target from $1.00 to $11.50, explicitly tying its thesis to steps the Trump administration may take to recapitalize Fannie Mae and move it toward an eventual exit from conservatorship. ^[19]

Quant and technical models send mixed signals

Short‑term trading models tell a more cautious story:

StockInvest’s AI‑driven technical analysis calls FNMA a “Hold/Accumulate” after cutting it from “Buy,” warning that the stock sits near the upper band of a falling short‑term trend and could see a sharp pullback if support levels fail. ^[20]
Their three‑month projection, based purely on technicals, even allows for a potential move down into the mid‑single‑digit range, though they explicitly note that the forecast will adjust if the stock can hold current levels. ^[21]

These technical warnings underscore that, even if the fundamental or political story remains positive, FNMA’s path is unlikely to be smooth.

Fundamental valuation: cheap on sales, expensive on some DCFs

A detailed December 5 analysis from Simply Wall St illustrates just how polarizing Fannie Mae’s valuation has become: ^[22]

On a price‑to‑sales (P/S) basis, FNMA trades around 2.3× revenue, versus about 4× for direct peers and roughly 2.5× for the broader U.S. diversified financials sector.
Their regression‑based “fair” P/S multiple lands closer to 6.3×, implying meaningful upside if sentiment normalized and the company were valued more like its peers.
However, their discounted cash flow (DCF) model tells a radically different story, suggesting a fair value closer to $2 per share, which would make the stock look significantly overvalued at current levels.

Simply Wall St concludes that investors are effectively choosing between “multiple expansion” and “DCF realism” — two narratives that can’t both be right at the same time.

The IPO and conservatorship: why structure matters more than headlines

For FNMA shareholders, the privatization debate is not just about if an IPO happens, but how.

Recent coverage of the Trump administration’s plans suggests: ^[23]

A potential public offering of a minority stake in Fannie Mae and Freddie Mac,
Valuations that could theoretically place a combined value in the hundreds of billions of dollars,
A sale of only a small percentage of government‑held shares, leaving the U.S. Treasury as the dominant owner.

At the same time, prominent investors like Bill Ackman have warned that the process of recapitalizing the GSEs, determining how much fresh equity is needed, and deciding what happens to existing common and preferred shareholders will be complex and time‑consuming. Some commentary has gone as far as to say the IPO is “far from ready.” ^[24]

The implications for current FNMA shareholders include:

Dilution risk: Raising new capital—especially if regulators insist on large buffers—could dilute existing common shareholders.
Capital structure uncertainty: How preferred shares, warrants, and existing government stakes are treated will materially impact common equity value.
Policy risk: A future administration or Congress could change course again, extending conservatorship or altering the economics of any deal.

In other words, IPO headlines are bullish for sentiment, but the fine print will decide who actually benefits.

Key risks for investors considering Fannie Mae stock

Even with the recent rally and high‑profile endorsements, FNMA remains a high‑risk, policy‑sensitive stock. Major risks include:

Regulatory and political risk
- Fannie Mae’s fate is deeply tied to the Trump administration, Congress, the FHFA and the Treasury. Decisions on capital requirements, dividend policies and stake sales can rapidly reshape the investment case. ^[25]
- A shift in political control after the 2026 midterms could alter or slow privatization plans.
IPO structure and timing
- If the eventual offering is smaller, slower, or more dilutive than bulls expect, valuations based on aggressive privatization scenarios could prove optimistic. ^[26]
Interest‑rate and housing‑market risk
- While Fannie Mae now expects mortgage rates to drift below 6% by end‑2026, the path is still uncertain and dependent on inflation and Federal Reserve policy. ^[27]
- A deeper‑than‑expected slowdown in home sales—relative to the already trimmed forecasts—could weigh on origination volumes and fee income. ^[28]
Credit and macroeconomic risk
- If unemployment rises or home prices fall more than anticipated, delinquencies and credit losses could increase, forcing higher provisions and pressuring earnings.
Valuation and volatility
- With the stock already up several hundred percent in a year and trading with high daily volatility, investors face the risk of large drawdowns even if the long‑term story remains intact. ^[29]

What to watch next

For readers tracking Federal National Mortgage Association stock from December 6, 2025 onward, several catalysts stand out:

Further details on the Fannie/Freddie stake sale or IPO
Look for concrete proposals from the Trump administration, the FHFA and Treasury on offering size, timing and structure.
Fannie Mae’s next economic and housing outlook updates
The ESR Group’s monthly and quarterly forecasts on home sales, mortgage rates and originations will shape expectations for Fannie’s 2026–2027 earnings power. ^[30]
Q4 2025 and full‑year 2025 results (early 2026)
Investors will want to see whether Q3’s $3.9 billion net income is the start of a sustainable trend and how quickly Fannie’s capital position continues to grow. ^[31]
Any regulatory changes around capital requirements or housing finance reform
Legislative or regulatory moves could materially alter the risk‑reward profile for FNMA shareholders.

Bottom line

As of December 6, 2025, Fannie Mae stock sits at the intersection of Wall Street speculation and Washington policymaking:

The bull case leans on Michael Burry‑style long‑term optimism, possible privatization, and the idea that a system‑critical, fee‑rich franchise is still undervalued relative to its scale. ^[32]
The bear case points to DCF models showing little or no upside at current prices, substantial dilution and policy risk around any IPO, and technical signals flagging a high likelihood of sharp corrections. ^[33]

For now, analysts as a group are sitting on the fence with “Hold”‑style ratings and targets only modestly above today’s price. ^[34]

Anyone considering FNMA should treat it as a speculative position heavily exposed to politics and macro conditions, not as a conventional, low‑risk banking or insurance stock. This article is for information and news purposes only and is not personal investment advice; investors should do their own research and, if needed, consult a qualified financial adviser before making decisions.