8/27/2023 0 Comments Rocket mortgage stock symbol![]() ![]() Then there’s the curious case of Rocket Mortgage ( RKT). At some point, housing prices may become too burdensome for families to bear, no matter how low mortgage rates are, which may crush demand. That’s driven up demand for existing housing, but there are only so many of that to go around. A shortage of construction workers combined with supply chain woes have delayed new home construction. Meanwhile, the current housing market has issues. Since mortgage rates are tied to Treasury notes, homebuyers now face higher borrowing costs. Higher inflation and concerns over the extent of Federal Reserve interest rate hikes has caused some investors to sell 10-year Treasuries, pushing rates higher (bond prices and yields are inversely related). A 30-year fixed rate mortgage now clocks in at 3.56%, up from 3.11% to start 2022. While has been able to make its bones in a low-rate environment, what happens when mortgage prices return to historical norms? How will that impact its refi business, for instance? The Case Against the IPOĪs anyone who lived through the housing market meltdown of 2005 to 2007 can attest, real estate ain’t always so rosy. Median home sale prices are currently around $405,000, according to the Department of Housing and Urban Development, up nearly $100,000 from five years ago. It’s also piqued the interest of potential buyers looking to borrow less to buy homes. This led to an avalanche of mortgage refinancing, as existing owners looked to take advantage of lower rates. That had dropped to 2.74% by the beginning of 2021. ![]() In October 2016, the interest on a 30-year fixed rate mortgage was 3.47%, according to Freddie Mac. This is the biggest of cohort of home buyers, making up 37% of the market, according to the National Association of Realtors.Īs noted above, recent history provided a headwind for mortgage companies. This kind of home buying experience is sure to connect with younger, digital native Americans between the ages of 22 and 40. Getting a mortgage is famously difficult, replete with a seemingly never-ending array of fees.ī’s website, on the other hand, is easy to use, its brokers don’t charge commissions or loan origination fees, and prospective buyers can get pre-approved in a matter of minutes. also has the backing of major financial institutions, like SoftBank and Ally.Ĭlearly, ’s plan to incentivize more regular folks to take out a mortgage online is working well. This impressive growth, according to the company, was a product of a labor force that costs about half that of its competitors, and that it completes more than twice as many loans per month than competitors. The companies are aiming to close the deal sometime before the end of the year.ī reported that its loan value had climbed to more than $24 billion in 2020, an increase of 490% year over year, while its title insurance business had grown by 855% year over year in 2020, its homeowners insurance was up 300% and real estate transactions were up 471%. In May 2021, the Softbanked-backed disclosed that it had entered a deal to go public via a merger with special purpose acquisition company ( SPAC) Aurora Acquisition. The only question then is whether you should see as a hidden gem, or more of a fixer-upper? The Case For ’s IPOĪs with any hot new company, there’s an impressive growth story with that investors hope they can build upon. ![]() Bigger players in the mortgage space like Rocket Mortgage have bumbled along despite impressive technology and intense home buying interest-and ’s founders come with their own baggage, including a recent controversy when ’s chief executive fired 9% of his workforce via Zoom. ![]() Yet uncertainty remains about ’s business. This five-year-old online mortgage startup has enjoyed tremendous growth in recent years thanks to these trends, plus its canny ability to streamline the famously laborious and expensive home buying process.ī has pushed fees and commissions down to zero, which has helped it do billions of dollars in mortgage originations, refinancings and title and property insurance sales. Mortgage rates are near historic lows, housing demand is sky high and millions of Americans are rethinking where to live as businesses embrace remote work. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |