LoanDepot is a mortgage lender that was founded in 2010 and is now one of the largest in the country. For the average investor, it's a sign of confidence that the future will be brighter than 2022. Farner has increased his position in the company from 1.7 million shares in March to 6.1 million shares today. The brilliant part of this plan is that it allows Farner to engage in a systematic dollar-cost-averaging of his purchases over time. This is a stock purchase plan on autopilot. He's done just that, as you can see below.īecause Farner made a plan to purchase a certain amount of stock, with "no authority, influence or control over any purchase of the company's common shares," you can't really read into the price at which he has been buying. One of the interesting things about this year for Rocket has been that the CEO, Jay Farner, announced a plan in early 2022 to personally buy $36 million in Rocket stock. Rocket Mortgage also offers 24/7 customer service to answer any questions customers may have and a nationwide marketing plan. They also offer competitive rates and fees due to economies of scale that make it easy for customers to save money on their mortgage. Rocket prides itself on a simplified online application process that makes it easy for customers to apply for a mortgage loan. Rocket also boasts a unique range of competitive advantages that set it apart from some other lenders. It was one of the first lenders to offer a completely online mortgage application process, allowing many consumers to apply and get pre-approved for a mortgage in just a few minutes.
Rocket Mortgage is an online lender that has revolutionized the mortgage process by operating a massive call center refinance operation. Here are some stocks you may want to watch. This could be the biggest contrarian investor call of the year. In that case, the downward cycle in mortgage originations may actually reverse. If a recession hits, like some economists have predicted, then rates may actually pull back slightly in 2023 (or 2024). At that time, mortgage stocks may be positioned for a recovery. In 2023, the rapid increase of interest rates may finally come to a halt.
#ROCKET MORTGAGE STOCK REDDIT UPGRADE#
This increases mortgage activity due to lower rates and helps to stabilize the housing market, allowing existing homeowners to remain in their homes or upgrade to a larger home, refinance to a lower rate, or purchase a new home with cheaper financing. When the overall economy is weak, the mortgage origination sector takes on an increased role in providing liquidity and stability to the housing market mostly because the Federal Reserve and other central banks will often increase the money supply, bringing down interest rates. This is reflected in these companies' earnings releases and stock prices. Not only has the refinance business nearly disappeared, but with mortgage rates topping 7%, purchase mortgage origination has hit multi-decade lows. The resulting spike in rates has caused an adverse reaction in housing and mortgage finance. The pace of this rate hike cycle is unmatched by any other period.
Here’s a chart showing the speed and path of rate hikes in comparison to prior cycles. For better or worse, this creates tremendous cycles.Īs we have seen in the past year, this sector has taken a large beating as rates have moved up at an unprecedented speed. This is because the sector is highly sensitive to swings in interest rates. During times of economic turmoil, when most sectors of the economy falter and there is a general lack of confidence in the equity markets, the mortgage origination sector is often the first to see a glimmer of hope. Many of these companies are also trading significantly below their recent IPO price.Īs a whole, the mortgage origination sector is somewhat counter-cyclical in nature due to its unique position in the broader economy. ( IMH ) are all trading at the bottom of their 52-week range. ( AOMR ), and Impac Mortgage Holdings, Inc. ( LDI), Finance Of America Companies Inc. In 2023, investors should consider mortgage originators, especially after seeing these companies' stock prices plummet in 2022.
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