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Enact Holdings topped profit forecasts last quarter, raised its capital return target, and struck an upbeat tone on the outlook for US housing -- even though revenue came in a touch light.
What does this mean?
Enact Holdings, a major mortgage insurance provider, reported adjusted operating income per share of $1.15 for the second quarter of 2025, beating Wall Street estimates. Revenue landed just shy of projections at $304.89 million, but business momentum made up for it: primary insurance in-force rose 1% sequentially to $270 billion. The company's loss ratio improved to 10% thanks to better cure rates and $48 million in reserve releases, while net investment income climbed to $66 million compared to last quarter. These solid operational results let Enact lift its full-year capital return guidance to $400 million, rewarding shareholders with a 13% return on equity. Analyst sentiment is upbeat, with zero 'sell' ratings and consensus price targets pointing to around 12% potential upside.
Mortgage insurers tend to act as a weathervane for the housing market's broader health. Enact's raised capital return guidance and a growing insurance portfolio point to steady demand and stability in US housing, even as affordability concerns linger. Trading at just 8 times forward earnings, the stock's valuation looks appealing in today's cautious environment.
The bigger picture: Confidence in the US home ecosystem.
Enact's update isn't just good news for the company -- it also hints at sturdy mortgage credit quality across the industry. While higher rates and affordability headwinds remain, strong insurer results suggest underlying fundamentals are more resilient than headlines may suggest. For now, Enact serves as a reminder that solid risk management and disciplined capital moves can drive returns -- even in a market full of question marks.