A recent CNBC report suggested rising rates are hitting mortgage demand by over 40% YoY. Still, Rocket Companies Inc (NYSE: RKT) CEO is convinced there’s ample opportunities for 2022.
Farner explains why he remains optimistic
Despite the slowdown, Jay Farner expects up to $2.50 trillion in mortgages this year – roughly the same as 2018 levels. Speaking with CNBC’s Kelly Evans on “the exchange”, he said:
As we see capacity come out of mortgage market, there’ll be opportunity for lenders who stick in, drive lead flow, and continue to deliver great client services. There’s $25 trillion of equity locked up in peoples’ homes. So, lenders can help clients activate that.
Farner’s optimism for Rocket Companies is also based on the large client base. The consumer lending company services 2.6 million clients monthly. In December, RKT announced a $1.275 billion acquisition of Truebill – it’s largest ever.
Mortgages will continue to make sense
The U.S. Fed plans on cutting back on buying mortgage-backed securities from next month. Still, Jay Farner says mortgages will continue to make sense. The chief executive added:
Five or five and an eighth on a 30-year fixed, payments are up $100-$150 from where we were at the start of the year for clients. After taxes, it’s about $100 a month. Although up a bit, still really competitive compared to other ways you can borrow money.
Farner sees the coming summer as a great time to sell a house and expects more inventory to come online in the coming months. Rocket Companies stocks is down 35% for the year.
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