WSJ and Rocket Mortgage

[Elliott]

Headline article in the WSJ this morning on Rocket Mortgage:

WSJ (10/31/22) "Mortgage Giant Rocket Plunges Back to Earth, Hit by Rising Rates​

With mortgage rates now above 7%, 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 Black Knight Inc., BKI 1.67%increase; green up pointing triangle a mortgage technology and data provider. Refinancing accounted for some 82% of the total dollar volume of Rocket’s loans last year, according to Inside Mortgage Finance, an industry research firm.

Getting potential customers to trade a 3% mortgage for a 6% one is like “pushing rocks up hills,” said Colin Wyzgoski, who quit a job as a banker in August after taking time off because of work stress.

The effort is challenging. Rocket’s loan volume is on pace to decline by more than half this year. Earnings at Rocket’s parent company, Rocket Cos., were down by more than two-thirds in the first six months of 2022. Analysts expect it to post its first loss as a publicly traded company when it reports third-quarter results on Thursday, according to FactSet. The share price closed Friday at $6.71, down 52% this year, which is almost three times the S&P 500’s decline. Its market value is around $13.2 billion."



I got a 1.99% refi with Rocket about two years ago. Don't think I'll be refi-ing again anytime soon.

 

[Charles West]

I got one with them as well...

 

[alebrewer]

With mortgage rates now above 7%, 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 Black Knight Inc.

Wow... that really puts it in perspective...

 

[Fernando]

Those who refinanced last year saved a lot of money compared to now despite my higher appraisal fee. You're welcome for my quick service in getting your loan.

 

[J Grant]

Headline article in the WSJ this morning on Rocket Mortgage:

WSJ (10/31/22) "Mortgage Giant Rocket Plunges Back to Earth, Hit by Rising Rates​

With mortgage rates now above 7%, 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 Black Knight Inc., BKI 1.67%increase; green up pointing triangle a mortgage technology and data provider. Refinancing accounted for some 82% of the total dollar volume of Rocket’s loans last year, according to Inside Mortgage Finance, an industry research firm.

Getting potential customers to trade a 3% mortgage for a 6% one is like “pushing rocks up hills,” said Colin Wyzgoski, who quit a job as a banker in August after taking time off because of work stress.

The effort is challenging. Rocket’s loan volume is on pace to decline by more than half this year. Earnings at Rocket’s parent company, Rocket Cos., were down by more than two-thirds in the first six months of 2022. Analysts expect it to post its first loss as a publicly traded company when it reports third-quarter results on Thursday, according to FactSet. The share price closed Friday at $6.71, down 52% this year, which is almost three times the S&P 500’s decline. Its market value is around $13.2 billion."



I got a 1.99% refi with Rocket about two years ago. Don't think I'll be refi-ing again anytime soon.

Sounds like they were more heavily vested on the refinance end rather than purchase loans so they will be hit harder than mortgage companies that did more sales - sales are down too now, but sales will pick up again when the rate goes below 7% ( and it will at some point ). refinances though - anyone who refinanced at a rate below 4% will not refi again so that volume is gone .

 

[Carnivore]

Sounds like they were more heavily vested on the refinance end rather than purchase loans so they will be hit harder than mortgage companies that did more sales - sales are down too now, but sales will pick up again when the rate goes below 7% ( and it will at some point ). refinances though - anyone who refinanced at a rate below 4% will not refi again so that volume is gone .

The problem looming on the horizon is Credit Card Usage is rising. Peeps can't make it to the next payday so they are using plastic. The smart person if they can should get a 2nd part time job(if you can find one) NOW to cover the inflation of living expenses/debt service and reduce discretionary spending. Tighten their Belts. I heard some of this within the past few days on FOX Charles Payne

The Higher Rates will really make it difficult to refinance debt consolidation. They simply won't qualify.

What is going on in cost of living is not temporary. The Idiot in Chief has made sure of that. You will submit 'Chicken' (Stalin's chicken).

Can the Republicans in Congress after the November election do anything? IMO Very Little. Mostly just gnash their teeth, whine, moan and point fingers. If they get the senate, all they can do is block all Judge Appointments by Ole Sniffer Joe

 

[jay trotta]

"Rates resumed their record-setting climb," said Sam Khater, Freddie Mac's chief economist, "with the 30-year fixed-rate mortgage reaching its highest level since April of 2002."

As a result, "demand has completely fallen off the table," McBride added. "Affordability was strained already from the surge in home prices, when you layer on top of that this never-before-seen pace in mortgage rates it compounds the problem."

The increase in mortgage rates since the start of 2022 has the same impact on affordability as a 35% increase in home prices, according to McBride's analysis. "If you had been approved for a $300,000 mortgage in the beginning of the year, that's the equivalent of less than $200,000 today."

Adjustable-rate mortgages and home equity lines of credit are pegged to the prime rate. Most ARMs adjust once a year, but a HELOC adjusts right away. Already, the average rate for a HELOC is up to 7.3% from 4.24% earlier in the year.

Fun times just keep rolling along.....hmmm

 

[J Grant]

The problem looming on the horizon is Credit Card Usage is rising. Peeps can't make it to the next payday so they are using plastic. The smart person if they can should get a 2nd part time job(if you can find one) NOW to cover the inflation of living expenses/debt service and reduce discretionary spending. Tighten their Belts. I heard some of this within the past few days on FOX Charles Payne

The Higher Rates will really make it difficult to refinance debt consolidation. They simply won't qualify.

What is going on in cost of living is not temporary. The Idiot in Chief has made sure of that. You will submit 'Chicken' (Stalin's chicken).

Can the Republicans in Congress after the November election do anything? IMO Very Little. Mostly just gnash their teeth, whine, moan and point fingers. If they get the senate, all they can do is block all Judge Appointments by Ole Sniffer Joe

Wonderful to see your political views in an appraisal topic. Courtesy of FOX. Which amazingly ignores the fact that inflation is world wide.

Only the marginal or desperate uses credit cards to pay living expenses. there is a portion of the population meets that criteria. The unemployment rate is still low, so the opportunity is there to get a second job or gig work /cut living expenses etc

My prediction is, regardless of which party prevails in mid terms, my prediction is inflation will tamp down in the spring and the FED will reduce rates enough to see mortgage rates go back below 7%.
The majority of folks who purchased or refinanced at low rates are sitting pretty, at least wrt mortgage payments- but many will be hit with a huge jump in property taxes .

We are in the Hangover phase after the big drunken party.
There are buyers who vastly over paid and the looming elephant is how many over leveraged in a refinance when prices were high and in a price decline, have none or negative equity. That does not hurt them as long as they remain in the house,, the problem arises if they need to sell, or tap into non existent equity for a HELO/other .

 

[J Grant]

"Rates resumed their record-setting climb," said Sam Khater, Freddie Mac's chief economist, "with the 30-year fixed-rate mortgage reaching its highest level since April of 2002."

As a result, "demand has completely fallen off the table," McBride added. "Affordability was strained already from the surge in home prices, when you layer on top of that this never-before-seen pace in mortgage rates it compounds the problem."

The increase in mortgage rates since the start of 2022 has the same impact on affordability as a 35% increase in home prices, according to McBride's analysis. "If you had been approved for a $300,000 mortgage in the beginning of the year, that's the equivalent of less than $200,000 today."

Adjustable-rate mortgages and home equity lines of credit are pegged to the prime rate. Most ARMs adjust once a year, but a HELOC adjusts right away. Already, the average rate for a HELOC is up to 7.3% from 4.24% earlier in the year.

Fun times just keep rolling along.....hmmm

Looks like a lot of us will have loads of free time for the next few months ! (or longer - will see but imo they will need to "rescue" the housing market by spring and will lower rates by then)

 

[Ricky LaFleur]

Only the marginal or desperate uses credit cards to pay living expenses. there is a portion of the population meets that criteria.

Desperate, sure. I'd say by the increasing CC debt levels and delinquency that the marginal portion is growing more than you might think.

That does not hurt them as long as they remain in the house,, the problem arises if they need to sell, or tap into non existent equity for a HELO/other .

What if they walk away? How long would one stay in an upside down asset with little skin in the game, even at a low rate?