Rocket Companies Inc. -Current market's rocket?-

[Thiebault]

Rocket Companies Inc. (Tikkeri $RKT, lyhyemmin: RKT tai Rocket)

Pörssissä rytisee (SPX -5,94%), mutta yksi firma nousi tänään (+11%) markkinaa vastaan isolla vaihdolla. Kyseessä on tietysti nimensä mukaisesti Rocket Companies.

Alla on lyhyt ja yksinkertaistettu johdanto/esittely, mikä mahdollisesti tekee Rocket Companies:ta yhden tämän hyvin poikkeuksellisen ajanjakson tähdistä ja miten yritys voi hyötyä Trumpin kaoottisesta ns. Reset, deleverage ja refinance –projektista. Markkina aloitti hinnoittelemaan RKT:ta tariffien jälkeen uusiksi, vaihtovolyymi kasvoi isompien pelureiden siirryttyä ostolaidalle ja samalla kiinnostuin yhtiöstä reiluhkon avausposition verran. Alla selviää miksi.

Yleinen tylsä esittely

Rocket Companies on Detroitissa, Michiganissa päämajaansa pitävä holding-yhtiö, joka tunnetaan parhaiten lippulaivabrändistään Rocket Mortgage -asuntolainapalvelusta. Se on Yhdysvaltain suurin asuntolainojen myöntäjä, ja sen liiketoiminta keskittyy digitaaliseen lainanantoon, kiinteistöpalveluihin ja kuluttajarahoitukseen. Yhtiö listautui New Yorkin pörssiin elokuussa 2020 ja on sen jälkeen ollut merkittävä toimija finanssiteknologian (fintech) alalla. Rocket Companies hyödyntää teknologiaa tehdäkseen asuntolainaprosessista nopeamman ja asiakasystävällisemmän, mikä erottaa sen perinteisistä pankeista.

Sen liiketoimintaan kuuluvat mm:

• Rocket Mortgage: Verkossa toimiva asuntolainapalvelu
• Rocket Homes: Kiinteistöjen välityspalvelu
• Rocket Loans: Henkilökohtaiset lainat
• Muut palvelut, kuten Amrock (kiinteistöarvioinnit) ja Rocket Money
(henkilökohtaisen talouden hallintasovellus)

Oma spekulointi Rocket Companies:n tilanteesta:

Mielestäni yksi Trumpin kaoottisen ja moniulotteisen projektin ensimmäisistä päätavoitteista oli aluksi saada mm. kananmunien, sitten bensan ja sen jälkeen muiden äänestäjien/MAGA:laisten peruskulut alas, jotta republikaanit lopulta voittavat 2026 välivaalit ja Trump vahvistaisi omaa valtaansa nykyistäkin enemmän. Pörssiromahdus on yksi ensimmäisistä tavoitteista ns. Resetissä sekä bondien deleverage ja refinance -projektissa ja tämän riskialttiin kaaottisuutta huokuvan suunnitelman yksi tärkeimmistä osa-alueista on samalla pudottaa amerikkalaisten Mortgage rate alas (asuntolainat).

US:n 30 -year Fixed Mortgage (6,64%) on suosituin laina jenkeissä. Valkoiset viivat ovat omat vähimmäisarviot koron laskulle 3-18kk sisällä.

Painamalla pörssin alas ja talouden epävakaaseen tilaan, Trump käytännössä pakottaa Powellin (FED) pudottamaan nopeutetusti korkoja, eli huomattavasti ”suunniteltua” nopeammin, jolloin uusien asuntojen korot ja erityisesti nykyisten asuntolainojen uudelleenrahoitukset tulevat aiempaa nopeammin ajankohtaiseksi.

Poikkeuksellisen nopea korkojen lasku tulisi lisäämään huomattavasti uudelleenrahoituksia sekä piristäisi selvästi jälleenrahoitusmarkkinoita, jolloin erityisesti uuteen kokoluokkaan juuri kasvanut Rocket tulisi suurella todennäköisyydellä olemaan yksi suurimmista pärjääjistä. Pankkien kärsiessä ennätysnopeasta korkojen laskusta (seuraava ohjauskoron lasku jopa toukokuussa 2025 ja loppuvuonna odotettua useampi lasku?), RKT menisi päinvastaiseen suuntaan ja suurella todennäköisyydellä hyötyisi tilanteesta usealla eri tavalla tehokkaan liiketoimintamallinsa ansiosta. Voisi sanoa, että kyseessä on eräänlainen Trumpin hallinnon organisoima asuntolainaajille suunnattu positiivinen ns. ”Bessent Mortgage put” (Scott Bessent, valtionvarainministeri), samoin kuin Bond markkinoille näyttää olevan oma puttinsa.

Rocketin liiketoiminta rakentuu kahden pääalueen varaan:

1. Asuntolainojen myöntäminen (origination)

• Rocket myöntää uusia asuntolainoja ja uudelleenrahoituksia.
• Tulot muodostuvat mm.:
  • Lainojen järjestelypalkkioista
  • Lainojen jälleenmyyntikatteesta (gain-on-sale lainoja myydään sijoittajille tai esim Fannie/Freddie:lle)
  • Pisteistä ja lainahyvityksistä
  • Uudelleenrahoituksen volyymista (mitä enemmän uudelleenrahoituksia, sen enemmän volyymia)

2. Lainojen hallinnointi (servicing)

• Myönnettyjen lainojen jälkeen Rocket usein säilyttää hallinnointioikeuden
• Tämän myötä Rocket kerää kuukausittaiset lainalyhennykset ja hoitavat laskutukset
• Tulot ovat näin ollen jatkuvia ja selkeästi vähemmän syklisiä.

Miten Rocket hyötyy, jos asuntolainojen korot putoavat paljon konsensuksen odotuksia nopeammin, esimerkiksi 7 → 5%:

1. Asiakkaat ryntäävät uudelleenrahoittamaan lainojaan

• Asiakkaat, joilla on korkeakorkoinen laina, haluavat nopeasti edullisemman lainan
• Jos Rocket hallinnoi jo alkuperäistä lainaa, kaikki tarvittavat asiakastiedot löytyvät jo järjestelmästä

2. Rocket käyttää aktiivista asiakassäilytysjärjestelmää

• Rocketilla on oma “Client Retention Score” -järjestelmä
• Rocket seuraa korkojen liikkeitä ja ottavat yhteyttä asiakkaaseen ennen kilpailijoita
• Esimerkki: asiakas saattaa saada valmiiksi esitäytetyn uudelleenrahoitustarjouksen heti kun korko laskee
• Rocketin liiketoimintamalli nojaa vahvasti teknologiaan, mikä antaa sille kustannusetuja verrattuna perinteisiin lainanantajiin
• Kuluttajien siirtyminen yhä enemmän verkkoasiointiin on tehostanut toimintaa

3. RKT:n ansaintalogiikka, jossa Rocket ansaitsee kahteen kertaan

• Rocket saa tuloja:
  • Uuden lainan myöntämisestä (uudelleenrahoitus)
  • Uuden lainan hallinnoinnista
• Jos he myyvät uuden lainan edelleen, he saavat lisäksi katetta kyseisestä myynnistä (gain-on-sale).

Omien väitteidensä mukaan Rocket kertoo saavuttavansa jopa 75–80 %:n asiakassäilytysasteen uudelleenrahoitussykleissä ja nyt alkava/alkanut sykli tulee mielestäni tarjoamaan poikkeukselliset ja positiiviset olosuhteet laajalle uudelleenrahoittamisaallolle, jossa RKT tulee olemaan merkittävänä pelurina yksi todennäköisistä pärjääjistä.

Mistä/miten Rocket saa tuloa korkojen laskiessa:

Tulonlähde:	Selitys tuloista:
Lainajärjestelypalkkiot	Asiakkaan maksamia kuluja.
Jälleenmyyntikate (gain-on-sale)	Lainan myynti sijoittajalle korkeammalla hinnalla.
Lainanhallintapalkkiot	Jatkuva tulovirta (esim. 0,25–0,50 % lainasummasta vuosittain, voi olla korkeampikin).
Ristiinmyynti	Lisäksi muut mahdolliset tulonlähteet, kuten vakuutukset, luottokortit, Rocket Money jne.
Volyymitehokkuus	Halvempi asiakashankinta – asiakas on valmiiksi ekosysteemin piirissä

Esimerkki Covid-refinance buumista. Huom! nykytilanteessa korot voivat laskea huomattavasti enemmän:

· COVID-pandemian aikana korot laskivat nopeasti (esim 30y Fixed rate putosi n. 3,6%->2,65%).

· Rocket teki yli 320 miljardin dollarin lainavolyymin vuonna 2020. Alkuvuonna 2021 asuntolainojen korot kääntyivät lievään nousuun ja lähtivät voimakkaaseen nousuun 2022 alusta ohjauskorkojen noston seurauksena.

· Suurin osa lainavolyymista oli uudelleenrahoituksia ja Rocket säilytti asiakkaansa.

· Rocket listautui pörssiin juuri, kun markkina oli huipussaan elokuussa 2020. Vuodesta 2022 alkaen lainojen korot nousivat rajusti aina 2023 vuoteen asti (huippu 30 -Year Fixed 7,8% 10/2023).

Riskejäkin on, koska uudelleenrahoitus ja asuntokauppa ovat syklisiä:

• Kun korot nousevat, Rocketin uudelleenrahoitusvolyymi romahtaa totaalisesti.

• Korkea korkotaso: Jos korot pysyvät korkealla tai nousevat edelleen, asuntolainojen kysyntä voi heikentyä, mikä painaa Rocketin tuloja. Henkilökohtaisesti uskon korkojen tulevan odotettua nopeammin alas ja odotettua syvemmälle Trumpin toimien johdosta

• Taantuma: Syvä talouden laskusuhdanne voi vähentää asunnonostoaikeita, vaikka korot laskisivatkin. Korkojen voimakas lasku toisi kuitenkin huomattavasti uudelleenrahoitustuloja

• Markkinamieliala ja finanssisektorin romahdusriski (meneillään olevan?) ns. Credit Bubble deflationin aikana: Fintech-osakkeet, kuten ehkä myös RKT, ovat herkkiä yleiselle markkinatunnelmalle ja markkinaromahdus voi pitää osakkeen alhaalla pidempään

Riskejä hallitakseen Rocket on laajentanut ja monipuolistanut toimintaansa viime aikoina mm. yritysostoilla ja muilla toimilla:

• Laajentanut lainojen hallinnointiin (vakaa tulovirta)

• Lendesk (ostettu 2021) Digitaalinen käsittely, vahvistaa asemaa mm. Kanadassa

• Truebill (ostettu 2021/2022) taloudenhallintasovellus kuluttajille, kokonaisvaltaisempi palvelu

• Laajentuminen asuntokauppapuolelle, mm. laaja tietokanta (Redfinin osto 2025, 1,75 miljardia$) integroida asunnonhaku ja rahoitus saumattomasti

• Mr. Cooper Group (Osto julkistettu 31.3.2025, kauppahinta 9,4 miljardia$) yhdistetty yhtiö kattaisi kaupan loppuvuoden hyväksymisen jälkeen 10 miljoonaa asiakasta ja 2,1 biljoonan$ edestä lainoja

• RKT satsaa henkilökohtaisiin talouspalveluihin (Rocket Money, Rocket Auto)

• Todennettu asiakaspysyvyys ja proaktiiviset työkalut tuottavat pidempää asiakasarvoa (CLTV) ja nykyiset hallinnoidut lainat tekevät asiakashankinnasta edullisempaa.

• Tavoite olla kokonaisvaltainen fintech- ja kiinteistöalusta

• Kaksinkertainen tulovirta (Uudelleenrahoitus + hallinta) yhdestä asiakkaasta tehostaa RKT:n toimintamallia.

Rocketin kurssi on vielä lähtötelineissä. Kasvava vaihtovolyymi viime päivinä.

Omia mietteitä:

Vastasyklinen potentiaali nousee esiin oman arvioni mukaan etenkin nykyisen kaltaisessa markkinassa, mutta on hyvä huomata, että korkojen noustessa (myöhemmässä vaiheessa) osake voi myös laskea nopeasti. Tällä hetkellä en näe inflaatiota tai etenkään korkojen nostoa merkittävänä uhkana, vaan odotan FED ohjauskorkojen laskusyklin kiihtyvän selkeästi konsensusta nopeammin loppuvuoden aikana.

Yhteenvetona voisi sanoa, että Rocket hyötyy suurella todennäköisyydellä meneillään olevasta poikkeuksellisesta taloustilanteesta ja etenkin sitä seuraavasta nousukaudesta, jossa korot ovat oman oletukseni mukaan nykyistä selkeästi alhaisemmalla tasolla. Myöskään inflaation nousua en pidä uhkana, vaan ennemmin kulutuksen sakkaamista, jossa kalliimpaa tuotetta (kuten autoa) ei yksinkertaisesti hankita. Oman arvioni mukaan nykytilanne ja Trumpin “suunnitelman” eteneminen aiheuttaa yleisestä käsityksestä poiketen nopeasti ohimenevän inflaation, jolla en näe olevan RKT:n toimintaa vaikutusta, paitsi tietysti uusiin asuntokauppoihin liittyen. Lainat tullaan kuitenkin varmuudella uudelleenrahoittamaan heti, kun korot alkavat laskea. Uskoisn myös, että analyytikot ovat myös sopeutumisvaiheessa, eivätkä ole ehtineet sisäistää, mihin tämä poikkeuksellinen tilanne on etemässä, joten siksi luotan toistaiseksi omaan näkemykseeni myös tämän firman kohdalla.

Tällä hetkellä sijoittajilla on muutenkin poikkeuksellisen vähän turvasatamia riskisemmissä osakkeissa ja jos 6-18kk 2026 välivaaleihin mallentamani suunnitelma toteutuu samalla, kun markkinaolosuhteet muuttuvat muodonmuutoksen tehneelle yritykselle harvinaisen suotuisiksi, niin odotan Rocketin arvostuskertoimien sulavan nopeasti. Tilanne elää päivittäin ja tapaus on niin tuore, etten ole tarkkoja laskelmia yrityksestä tehnyt (ainakaan julkaisukelpoisia), joten numeroista tykkävät voivat tehdä omat arvionsa kasvunäkymistä ja mallentaa kasvun kulmakerrointa korkojen/bond yieldien pudotessa. Riskeistä huolimatta itse pidän näkymiä alustavasti harvinaisen suotuisina lyhyellä ja keskipitkällä aikavälillä (0-3v). Lyhyestä pörssitaipaleesta ja lukuisista strategisista yrityskaupoista johtuen firmalla on mahdollisuus yllättää markkina ja sijoittajat merkittävällä kasvulla, jos näkemykseni seuraavien 18kk tapahtumista osoittautuvat oikeaksi.

Talouslukuja yms linkkien takana .

Koyfin | Advanced graphing and analytical tools for investors

RKT - Rocket Companies Inc Forecast, Target Price

Rocketin liiketoimintamalli hyvin yksinkertaistettuna (TL;DR):

• Kun korot laskevat nopeasti, ihmiset hakevat lainojen uudelleenrahoitusta → Rocket tekee tulosta
• Heidän asiakkaiden säilytysstrategiansa (retention strategy) takaa, että nykyiset asiakkaat pysyvät Rocketin asiakkaina myös uusitujen lainojen yhteydessä ja heidän ekosysteeminsä piirissä.
• Tuplalaskutus (lainanmyöntö/hallinnointi ja “gain-on-sale”)

[Chuckecheese]

Thanks for the clear explanation! Has the company disclosed at all what kind of lending criteria they have? When the economy falters and unemployment rises, there’s a risk that customers will no longer be able to manage their loans and credit losses will start to increase.

[Thiebault]

As I understand it, in the US, widely used conditions are largely applied, meaning a so-called credit score is used, the minimum of which seems to be 620 for loans, unless it’s possible to get some government guarantee or other relief, such as for veterans (VA, lowest FICO 580) or, for example, a guarantee intended for first-time homebuyers (FHA, lowest FICO 580). I will elaborate further on my views later, e.g., regarding potential credit losses.

Below is the answer provided by AI, which is the average for the most commonly used FICO scoring:

Average FICO Score in the U.S. : 717

· Below 620: You’re usually limited to government-backed loans (FHA, VA).

· 620–679: Considered “fair credit” — limited options but still workable.

· 680–739: “Good credit” — much better rates and broader choices.

· 740+: “Very good/excellent” — best rates and terms.

Quick Comparison Table:

Feature	VA Loan	FHA Loan	Jumbo Loan
Down Payment	0%	3.5% (min)	10–20% (typical)
Credit Score	580+ (often)	580+ (3.5% down)	680+
Mortgage Insurance	No PMI	Yes (MIP required)	No, but stricter terms
Loan Limit	No official limit	Set by area	Above conforming limit
Government Backed?	Yes (VA)	Yes (FHA)	No (private lenders)

[Thiebault]

I will further elaborate on my broader view, as it also relates to Rocket. This is a kind of 6-18 month swing trade, with which I am taking a stance on the matters mentioned in the first message and on a longer-term plan that, in my opinion, differs somewhat from the consensus.

I have been following Rocket for a few months, but only got to know it in more detail last week and opened a position when market conditions changed enough, so there is still a lot to research. It should be noted that in all stock investments, risks are currently exceptionally high, and timing is important whenever possible. Numerous “great” tariff deals negotiated by Trump are likely to emerge next week. In this chaotic situation, one must also be on guard for these radical turns, and my own plan is under non-stop update, as I believe the situation will change rapidly, even though the bigger picture (6-18 months) has so far (and unfortunately) progressed according to plan. Although there will likely be rallies in between, I would see Trump’s plan as being only in its initial stages.

I would assume that Trump understands very well that his popularity in the eyes of the “common man” is not based on whether the stock market collapses (although it affects, for example, 401k retirement accounts and those approaching retirement age may be in trouble), but rather on how much consumer products cost and how much their prices can be pushed down by the 2026 midterm elections. I also believe Trump imagines that he can turn the stock market upwards when he wants to, when the time is right, and at the latest when the reset is complete, and this year’s maturing bonds have been refinanced, and (policy, bond yield, mortgage) rates have been pushed down sufficiently.

For the average citizen, i.e., Trump’s (and in the midterm elections, the Republicans’) potential voter, the greatest significance is likely how much basic living costs, whether jobs are available, and what the value of their own home is, and especially, what the current mortgage rate is and whether they can afford to pay it. The tariff decision was significant because, in my opinion, it practically sealed the fact that no interest rate hikes are coming. Furthermore, I estimate that Trump intends to pressure Powell to lower interest rates, even to rock bottom (i.e., zero), starting at the latest by the end of this year. These events are also likely to affect mortgage rates, where I do not see upward pressure.

I would also see that (in Trump’s opinion) unemployment will not be a problem, as cheap labor has been effectively brought across the border, and even if large tech companies lay off people, smaller American companies may, with the support of Trump’s policies, still be able to hire and fill, at least in Trump’s mind, the gap left by the larger ones. The administration also has opportunities to support new home buyers and homeowners in various ways to ensure that homes are not lost under any circumstances: for example, easing down payment and Debt-to-Income ratios, temporary payment deferrals (up to 12 months), planned tax breaks, temporary foreclosure moratoriums, supporting the MBS market, and numerous other means and flexibilities. For example, during the COVID-19 crisis, the CARES Act was used, which allowed government-backed loans to be payment-free for up to 12 months. In the aftermath of the 2009 financial crisis, the HARP (Home Affordable Refinance Program) was used, which helped millions of homeowners. I would see that one of Trump’s main goals is to keep homeowners (i.e., voters) satisfied by all means, so I do not currently see credit losses or a widespread wave of insolvencies as likely, even though the threats are indeed high.

I also assume that from Trump’s perspective, a rapid, stronger-than-expected drop in interest rates would clearly be the most effective way to improve the situation for Trump’s voters. However, a rate cut is not yet desired (in Trump’s opinion), as that card should be kept hidden until it is truly needed. There is not much time until the midterm elections, so I would see that Trump’s hectically progressing plan had to be accelerated, and getting the stock market crash underway was one of the most important measures for the overall picture, because there is no time to waste (in Trump’s opinion). Trump has also publicly stated that he wants to push mortgage rates below six and possibly even five percent by the midterm elections.

Rocket has been heavily shorted, and that is probably part of the reason for the strong rise after the tariff announcement, as the market situation also changed in my papers to be more favorable for RKT. In my opinion, the market began to price in sharply falling interest rates, and although Powell’s speech last week halted the decline in the Mortgage rate, the slightly longer view is that Powell will have to cut rates at the latest by the end of the year.

Finally, the BIG disclaimer. The plan is based, among other things, on what Trump, Lutnick, and Bessent have said in several different interviews, numerous sources, and how situations have progressed so far. Building an investment thesis based on Trump’s internal moves is in no way sensible, so at the same time, I follow macro data, such as unemployment, CPI, PCE figures, and mortgage rates, as well as Bond yields and, of course, the overall picture. The strategy is otherwise based on a broad, non-consensus macro view and combines politics, central bank actions, consumer behavior, and housing market dynamics, as well as general market movements and the number of short positions.

I also see the next 18 months as an exceptionally volatile period, and I will sell and buy positions as a result of quick decisions, realize profits, use stop-losses, and trade around positions. I will also quickly change my mind, especially if data and situations change significantly and the plan simply does not work. I currently consider Rocket Companies a good investment lasting approximately 18 months, if the theses I have written above are realized even partially. I cannot form an opinion on a longer-term investment with this information.

[Thiebault]

A couple of things that are under daily observation related to, among other things, Rocket and the US housing market in general; e.g., US Bond yields, mortgage rates, the homebuilders sector, and the movements of short sellers. Trump’s brilliant and probably meticulously refined plan has not started in the best possible way, and bond yields (e.g., US10y) jumped very strongly yesterday and today from last week’s significant dip. The rise in the ten-year bond has been strong in a couple of days, from 3.86% to 4.291%, and this so-called safe haven has been less safe. In my understanding, the two-day movement in bonds is one of the largest in history, meaning it is a very exceptional market. Bond yields are connected to, among other things, mortgage rates (and MBS), because there is competition for the same available liquidity, and both move hand in hand. According to rumors, China and other countries might be dumping US bonds, but there is no certainty about that. Trump’s actions certainly do not inspire much confidence among foreign investors.

Attached are a couple of mortgage-related Tweets and a link to the Mortgage News Daily website, where you can see daily movements in mortgage rates. The sharp market movements of recent days have not been positive for companies operating in the housing market and for general confidence, meaning that until the headwinds show a turnaround, companies in the sector are easy targets, especially for short-term short sellers, and selling pressure is heavy (for RKT) relative to trading volume after its strong rise.

March housing market statistics:

30y Fixed rate has risen for a couple of days, e.g., amidst bond market turmoil:

Today's Mortgage Rates : Daily Index

My Homebuilders watchlist:

[Thiebault]

The International Monetary Fund (IMF) lowered the US economic growth forecast from 2.7% to 1.8%, while the recession forecast has risen to around 40%. Consumer confidence has also collapsed worldwide, partly due to tariffs slowing down the economy.

Furthermore, Trump’s public pressure on Powell to lower interest rates hints at what Trump is willing to do to force rates down. A decrease in interest rates would most likely also lower mortgage rates and increase refinancings.

The overall market is up today, as are homebuilders and mortgage service providers benefiting from lower interest rates, such as Rocket Companies. The mortgage market also generally benefits from falling interest rates, which in turn is strongly tied to the government bond market (bond market).

The IMF also warns of inflation due to higher tariffs, slower growth, and stagflation. In the current situation, it is possible that the “housing market” acts as a hedge against inflation/recession, and since many investment portfolios and retirement savings accounts have collapsed during the Trump administration, housing may appear as a more attractive and stable investment than other investments suffering from severe volatility.

My bet on RKT is partly based on a situation where homeownership is considered a stable safe haven, and the US economy does not fall into a severe recession, and RKT benefits as refinancings and the number of new mortgages rapidly increase due to falling interest rates (6-18 months). I believe that Trump’s actions will not ultimately cause a widespread wave of homeowner loan defaults, even if the economy significantly weakens at the same time. As interest rates fall, it also becomes possible for more people to apply for mortgages, although in an uncertain situation, significant purchases are considered carefully.

A potential interest rate cut faster than consensus expectations could also boost home purchases and simultaneously increase refinancings, and a rapid drop in mortgage rates would be a positive scenario for companies like Rocket Companies. The construction of new homes may also slow down, causing scarcity in the market if, for example, building material prices rise, and in that case, owner-occupied homes would better retain their value and their sale might become easier. Additionally, higher material costs could raise the prices of new homes, which would support the value of owner-occupied homes.

Furthermore, potential inflation is almost purely supply-side driven (i.e., by tariffs) and could attract cash buyers. This is primarily a “typical supply shock” rather than a systemic flaw, as was the case during the financial crisis. As a side note, I am personally closely monitoring whether affordable homes appear for sale. Currently, investments in gold, Bitcoin, and owner-occupied housing have been among the best safe havens, but the situation will certainly evolve significantly over the coming months.

With the market moving strongly, I find it sensible to scale positions into the biggest dips and overshoots, and as long as there are no significant changes in the overall thesis, I consider RKT an interesting target. On the other hand, investments offering refinancings require extensive economic monitoring, macro integration, and individual news and changes in sentiment strongly swing prices up and down, and the company is shorted immediately if there is even the slightest reason.

For now, I believe that people’s need to invest in real assets will not change, and interest rates will fall (rather than rise in 6-18 months), although a significant wave of unemployment and/or a total erosion of purchasing power would, of course, increase the riskiness of the investment. My current view is that the situation will not lead to a severe recession, and in anticipation of a wave of foreclosures, the administration has numerous effective support measures ready from the time of the financial crisis. Of course, confidence in the Trump administration’s decision-making is not particularly strong.

Homebuilders +RKT

[Thiebault]

Citron Research and Andrew Left, known for short attacks, seem to be running a multi-day, multi-message pump-like X posting campaign about Rocket Companies, stating they have just bought more shares. And the shares reacted today as well with a nice bounce to the message.

I still agree with almost everything, and that’s why I also increased my position after the results, and the intention is to buy even more. In addition, I extended my investment perspective from the original 18 months to 5 years+. My investment strategy includes finding companies that can truly leverage AI, and in my opinion, RKT is one of the pioneers in its field.

The results were published on May 8th and were pretty much in line with expectations. Due to the exceptional “Trump spice” in Q1 and also the beginning of Q2, the near-term numbers don’t matter much, and the market didn’t really care about them. The focus is on the platform’s strength, long-term future potential, and the merger at the end of the year.

[Thiebault]

ValueAct Capital has opened a 9.9% stake in Rocket Companies according to the recently released 13F/D, and Soros has also bought 360,400 shares. According to the latest information, the stock has been shorted 12.34 - 32.6% (and days to cover 32.6% is 5.7). The actual number of shorts is very unclear. In any case, the free float just decreased, as ValueAct has generally been a long-term owner.

[Thiebault]

Yesterday’s US 20-year Treasury bond auction was particularly weak, and participants in financing government debt, presumably foreign entities, appear to be demanding a significantly higher yield based on yesterday’s auction to participate in financing US debt. Stock markets reacted immediately after the auction with a clear decline. Long-term interest rates (e.g., US20y 5.175% and US30y 5.153%) rose across the board to their highest levels of the year yesterday as a result of the auction. Today, however, the bond market has been significantly calmer.

The 30-year fixed-rate mortgage also rose to its February peak, i.e., 7.08 percent. Existing home sales fell slightly to 4.00 million (the expectation was 4.02 million homes). This figure can still be considered reasonable, given the market’s uncertainties. This figure is the lowest for April since 2009.

The chart below shows how exceptional the (housing) market has been in recent years. Over time, the situation will likely correct closer to the average, and even a small increase in home sales and a decrease in mortgage rates will ultimately benefit RKT. However, the turnaround may take time.

The number of new mortgage applications decreased by 5% from the previous week, and refinancing applications also fell by the same amount. However, it is interesting to note that compared to a year ago, the number of new loan applications has increased by +13%, and refinancing applications by as much as +27% compared to a year ago.

https://www.cnbc.com/2025/05/21/mortgage-demand-drops-after-interest-rates-jump-to-the-highest-level-since-february.html

Bond movements will continue to strongly affect the MBS market and mortgage rates, and thereby companies like RKT and investors’ short-term sentiment. ValueAct’s approximately 10% stake in RKT, purchased last week, was acquired at an average price of $12.07. This area acted as a certain level of support today (so far, the bottom is $12.03).

[Thiebault]

Sales of new homes were at a higher level than expected in April.

Redfin expects the average mortgage rate to remain high at 6.8% for the rest of the year. On the other hand, at that point, if/when rates actually start to fall, I would believe RKT and similar companies would have bottomed out long before that.

[viljo]

Glad you’re writing. I myself am a UWMC owner with a good 10% weight in my portfolio. The stock went to 9.5 dollars when interest rates dropped, but has fallen to 4 dollars and pays a 10% dividend while waiting.

These are probably the toughest competitors.

[Thiebault]

@viljo

Glad you’re writing.

No problem, thanks to the RKT position, I follow, for example, the bond/housing market much more closely.

The chart below shows quite well the negative correlation RKT has with, for example, the yield of the US 10-year Treasury bond.

Tonight’s US02(y) auction was more favorable to the markets than the previous US20y (stocks and bonds gained support).

[viljo]

I gladly follow what you write. Uwmc is also 15% shorted.

[Thiebault]

A fairly strong and confidence-inspiring 7-year note auction just a moment ago. Yields are falling, and this could also be positive for risk assets. The rise in interest rates may also subside, also affecting mortgages.

EDIT: Additionally, Trump finally met with Powell a moment ago. I believe that gentle pressure to lower interest rates will continue.

EDIT2:
Pending home sales collapsed significantly more than expected, by -6.3%. This was already reported a few weeks ago. Furthermore, April’s data is 28 days old, so the situation has evolved considerably since then.

[Thiebault]

An interesting situation is unfolding in the US housing market. The number of homes for sale relative to buyers is higher than it has been in a long time, meaning there are 34% more sellers. Many are likely trying to sell their “overpriced” homes, and it’s a buyer’s market, but uncertainty and high interest rates are curbing buying interest.

Today’s 3 and 6-month Bill auction was mixed and perhaps slightly bearish for risk assets. 6-month bonds were slightly stronger than 3-month bonds.

The image below clearly shows how housing prices eventually rise with inflation, and significant downturns are rare. Buyers need to consider when is generally the most sensible time to buy a home, and waiting for the optimal moment is challenging. Supply/demand is already in a strong imbalance:

The graph shows the interest rate levels at which current mortgages have been taken out.

[Thiebault]

Rocket’s (Redfin and Coop) merger intentions facing slight headwinds. The merger deals are significant for Rocket (and also for homebuyers), so it was very likely that they wouldn’t go through easily.

US senators press antitrust enforcers over Rocket-Redfin deal

• Democratic, Independent senators express concerns
• Say DOJ and FTC should consider effects on homebuyers
• Deal scheduled for shareholder vote Wednesday

“A group of U.S. Senators have demanded that federal antitrust enforcers explain why they did not seek to block Rocket Companies’ RKT $1.75 billion acquisition of real estate listing platform Redfin RDFN, saying the deal could raise costs for homebuyers.”

U.S. senators including Elizabeth Warren and Cory Booker, the top Democrats on the Senate banking and antitrust committees, wrote to the U.S. Department of Justice and Federal Trade Commission on Wednesday asking why they had not challenged the merger announced in March.

Redfin shareholders are scheduled to vote on whether to approve the deal on Wednesday.

Rocket’s announcement that it plans to acquire mortgage servicer Mr. Cooper COOP for $9.4 billion only raises further concerns about consolidation in the homebuying industry, said the group, which included Senator Bernie Sanders of Vermont, an Independent, and Democratic Senators Mazie Hirono of Hawaii and Tina Smith of Minnesota.

“These deals would combine the second-largest mortgage originator, the largest mortgage servicer, and the third-most-visited real estate brokerage website in the United States, into a massive, vertically integrated conglomerate that may reduce choice and raise prices for American families in the housing market,” the lawmakers said."

US senators press antitrust enforcers over Rocket-Redfin deal

Bond yields dipped, for example, after weak ADP employment figures and soft ISM Services PMI data. Trump once again immediately signaled how late Powell is regarding interest rate cuts.

EDIT2 I would see today’s negative data and the drop in yields as temporarily/slightly bullish for risk assets/the general market, with investors likely speculating on faster interest rate cuts. The economy is certainly softening alongside this, but in my view, a deeper recession will ultimately not materialize. Many often try to short weak data immediately after its release, but the market moves in the opposite direction, or a more significant move fails to materialize or comes only later.

EDIT: Interest rate forecasts before today’s data and upcoming updates.

18.6.25

30.7.25

17.9.25

29.10.25

10.12.25

[Thiebault]

Citron Research takes a stand on Elisabeth Warren’s concerns that Rocket would become too dominant a player in the housing market after mergers, and that Redfin/Coop mergers should be scrutinized more closely by competition authorities, according to Warren.

I completely agree with Andrew Left that this is precisely why Rocket is a good investment, and after the mergers, RKT would dominate the mortgage market.

Technically, the stock is currently in the $13.20 resistance area, and if it finally breaks through, the next resistance is around $13.61. My own longer-term targets, however, are at completely different figures. The stock is still estimated to be over 40% shorted, so an interesting situation is underway, as yesterday’s and today’s weak employment figures clearly shifted interest rate cut prospects in a more positive direction for RKT.

EDIT: Redfin shareholders approved the acquisition offer today.

[Thiebault]

RKT rose a moment ago with fairly significant volume when Josh Brown on CNBC named Rocket Companies as the day’s Final Trade. The concise reasoning was that he continues to be long. As a side note, the other Final Trade was Uber, which has long been his second largest position, right after Rocket and Robinhood.

https://www.cnbc.com/video/2025/06/20/final-trades-rocket-companies-kkr-gxo-logistics-and-uber.html

Short volume on RKT is still over 40%, so the consensus has been “higher for longer” regarding the continuation of high interest rates and the bearishness of the housing market. The majority (i.e., 96.1%) however expects interest rates to be cut by at least 25-50bps by December at the latest. I myself have countered that view, for example, with my Rocket investment, and the target is still next year’s midterm elections. Wednesday’s FOMC did not, however, raise expectations for rate cuts, but the FED still emphasizes being data-dependent and forward-looking, while also admitting that it does not know how the economy will react in the future and wants to see how tariffs affect inflation, especially during the summer.

Trump regularly continues his mantra about how Jay “Too Late” Powell is always late and no pressure tactic has worked. For once, I agree with Trump, but on the other hand, Powell understandably does not want to use his last interest rate weapon too early if the economy were to start faltering more significantly. I have bought Rocket on several dips, and the view is still that Rocket will dominate the mortgage market in the coming years and in the future, so short-term uncertainty mainly offers opportunities to add to positions. One significant risk for the end of the year is that the merger with COOP faces headwinds from regulators, as Rocket could become too dominant a player.

Technically, RKT has been relatively clear; the cost basis area is around $12-13. RKT fluctuates significantly with, for example, bond yields, data, and economic news.

In related news, Fed Governor Waller is perhaps eyeing the Fed Chair position with his comments that the central bank should cut rates as early as July. Powell’s term ends next spring, and it is certain that Trump will appoint a person (the Senate must approve the choice) whom he can at least somewhat control. Candidates include at least Ex-Fed Gov Kevin Warsh, White House advisor Kevin Hassett, VM Bessent, and Fed Gov Christopher Waller.

https://www.cnbc.com/2025/06/20/fed-governor-waller-says-central-bank-could-cut-rates-as-early-as-july.html

[Thiebault]

Positive Rocket news for the day, quickly listed:

• Mr Cooper (COOP), merging with RKT, maintained and received stable RMBS servicer ratings from Fitch. (Residential Mortgage-Backed Securities)

• Existing home sales rose slightly above expectations (expected 3.96M, actual 4.03M):
  

• Iran’s retaliatory strike was warned about in advance, and oil prices immediately fell after the strike, boosting indices, and sharply falling oil prices again lowered inflation risk. Trump also pushed oil prices down with several different messages during the day. Lower oil prices curb inflation, which could potentially lead to faster interest rate cuts.

• The technical support level area of $14.00-$14.14 was backtested, and from there, the stock bounced to the day’s highs of $14.69, where it also closed with good volume. The MA200 has been broken and stayed above it for a couple of days. Over 40% of the shares are still shorted. A squeeze is possible, good luck shorts.

• Currently, 81.1% expect an interest rate cut in September. Previously hawkish Fed Gov Bowman today turned to consider faster rate cuts (even in July? expectation for a July cut this morning was 22.7%).

[Thiebault]

Rocket Companies and Redfin Corp. merged today, and Redfin owners received 0.7926 RKT shares for each Redfin share. The merger was attempted to be blocked through legal means, and several senators also opposed the merger, but it ultimately went through relatively smoothly. The fear after the mergers is that RKT will form a massive company that harms industry competition. These fears are likely well-founded, and my investment is based on them. Rocket, however, overcame a significant Antitrust milestone when the HSR Act waiting period finally ended on 4.6.2025 without major issues.

Later this year, the acquisition of Mr. Cooper is expected, which shareholders will vote on, and it is highly probable that it will also face opposition from regulators, as, if realized, Rocket would be able to offer a comprehensive AI service to homebuyers and refinancers. The merger would streamline the entire lending process and, according to Rocket, also lower customer service fees.

For example, today, in connection with the Redfin merger, Rocket offered incentives to its customers, such as a 1% mortgage interest rate reduction for the first year or a $6,000 credit for customers who use both Rocket Mortgage and Redfin’s services.

Along the way, several hurdles are likely to be encountered, such as various smaller legal processes, and I believe that some short sellers expect the Mr. Cooper merger not to go through. The stock was heavily shorted last week by a whopping 52%, and RKT is seventh on one of my lists as the most likely stock in the USA to experience a short squeeze in the near future. During the last significant short squeeze in 2021, RKT rose by approximately +75% in one day, from which it fell the next day.

Rocket has spent approximately $500 million on developing its AI platform, which allows processes to be scaled without additional costs. RKT’s goal after the mergers is to aim to capture 20% of the entire US mortgage refinancing market and approximately 8% of the purchase loan market.

Mortgage rates have slowly decreased in recent weeks:

The link below contains an inquiry from Senator Elizabeth Warren and Bernie Sanders & co regarding why Rocket’s mergers have not been blocked by competition authorities. The complaint text paints a rather bullish picture for Rocket’s future.

https://t.co/Maan1bh6b7