Rocket shares rose approximately 6.3% after CEO Krishna revealed optimistic projections ahead of the company's earnings report on February 19. During an appearance on CNBC's "Squawk Box," Krishna stated, "We're getting ready for our earnings call here in just a couple of weeks, and I will share with this group that we're on track to produce the highest mortgage loan production in terms of volume that we've had in four years, and the highest gain on sale that we've had in four years as well."
The interest rate for a 30-year mortgage fell 22 basis points to 5.99% last month, equaling the low seen on February 2, 2023, according to Mortgage News Daily. This decline followed former President Donald Trump's announcement on social media that he instructed mortgage giants Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds.
Krishna credited Rocket's competitive advantage to its integrated approach to mortgage servicing and origination, which facilitates strong customer retention. This strategy allows Rocket to maintain relationships with borrowers, enabling the company to re-engage clients seeking new home purchases or cash-out refinances through its servicing platform.
"When they're ready for their next purchase, when they're ready for a cash-out refinance, Rocket is there with a great experience, powered by AI. And because of that, we're able to retain our clients, whereas other players simply lose the asset," explained Krishna.
Looking ahead, Krishna expressed confidence in the housing market's future, noting industry predictions of a 25% growth in the mortgage market by 2026, alongside a potential 10% increase in existing home sales as affordability improves and pent-up demand resurfaces.