DETROIT–Rocket Mortgage, which in recent years has been overseeing lending growth like a, well, rocket, is now seeing that growth plunging back to earth.
The company, which is America’s largest home lender, has been racking up more than double the refi volume of any other lender, accounting for more than $1 of every $10 lent out during a boom for the mortgage industry, according to the Wall Street Journal.
But now that the Fed is pushing rates up near 5% and Freddie Mac is reporting the average rate on the 30-year mortgage recently topped 7% for the first time in two decades, refinancings don’t make as much sense for homeowners.
Just 133,000 U.S. homeowners can save money by refinancing at today’s rates, down from a peak of over 19 million in late 2020, according to data from Black Knight Inc., a mortgage technology and data provider, cited by the Journal.
8-in-10 Loans Were Refi’s
The report noted refinancing accounted for some 82% of the total dollar volume of Rocket’s loans in 2021, the Journal said, pointing to data from Inside Mortgage Finance.
“Rocket has switched its focus, selling mortgages on new purchases and pitching customers on refinancing packages that allow them to pull cash out of their homes,” the Journal reported. “It is also trying to get smaller—shrinking its ranks through a mix of buyouts and attrition, rather than the layoffs that have become commonplace at its competitors.”
According to the report, Rocket’s loan volume is on pace to decline by more than half this year, and earnings at Rocket’s parent company, Rocket Cos., were down by more than two-thirds in the first six months of 2022.
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