Rocket recently acquired tech-focused brokerage platform Redfin, which combines the largest mortgage originator with the No. 1 brokerage website by traffic. Both companies have done a great job of making their respective parts of the real estate transaction process easier for consumers, so combining the two could be a massive win -- especially considering that Rocket is offering incentives for clients to buy through Redfin and finance through Rocket.
The company is also expected to close on its acquisition of the largest mortgage servicer in the U.S., Mr. Cooper Group, in the fourth quarter. This will add almost 7 million new servicing clients (Rocket already has about 2.8 million), creating tremendous opportunities in addition to the added recurring servicing fee revenue. For example, the mortgage servicing relationship gives Rocket the opportunity to recapture these millions of clients when they eventually buy a new home or decide to refinance.
A massive opportunity
To say that Rocket has a big growth opportunity would be an understatement. There are roughly $2 trillion in mortgages originated in the United States in a typical year, and the top 10 mortgage lenders have less than one-fourth of the market. So even though Rocket is a leader, there is plenty of room to gain market share, especially if its strategy of creating a one-stop real estate shop that makes the entire transaction process better starts to gain steam.
Additionally, the next several years could bring an above-typical level of mortgage volume. After about three years of a virtually stagnant real estate market, there is a lot of pent-up demand for homes. Many would-be first-time homebuyers have been on the sidelines, as high mortgage rates have limited affordability, and there are plenty of people who would love to sell their homes and move up, but feel stuck in place because they have a much lower mortgage rate than is available today.
Then there's the potential refinance boom. Mortgage refinancing has historically been Rocket's bread and butter, as the company has made it far more convenient to tap into equity than most traditional lenders. In 2021, Rocket's origination volume was roughly four times what it is now, and refinancing was a big reason.
I believe 2026 could be an even bigger year for refinancing. American homeowners have $35 trillion in home equity -- more than ever before. Many homeowners have delayed big projects simply because it didn't make good financial sense to borrow against their homes. If we see mortgage rates trend toward the 5% level, which I see as completely possible in 2026 if the Fed cuts rates a few more times, there could be a surge in refinancing volume that surprises a lot of the experts.
Will Rocket Companies outperform all of my other stocks?
I believe Rocket Companies has a great chance of being my best investment in 2026, but to be fair, this is extremely hard to predict. For one thing, I own 40 to 45 stocks at any given time, and it's entirely possible that the right combination of catalysts will cause one of the others to skyrocket. And I certainly wouldn't be upset if that happened.
The point is that not only does Rocket have tailwinds as a rate-sensitive business, but 2026 is the first full year we'll see Rocket's one-stop real estate platform in action. If Rocket starts gaining serious traction when it comes to customers completing the entire transaction process through Rocket's businesses, it could result in tremendous upside for investors. (Side note ) 6/30 toots report
Blackrock -20+ % change Stanley -15+% change —————————- Have a great day people ,Gotta go exert myself lol GLTA-Ts
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