Shares of Rocket Companies (RKT), a tech driven company who operates Rocket Auto, Rocket Mortgage, Rocket Loans, Amrock and others, has seen a 20% rise in stock price following the announcement.
According to a recent press release, the company has seen explosive growth, 144% year over year and declares a dividend of $1.11 per Class A stock. Farner, after being asked what a rise in interest rates means for the company, said interest rates will not impact the company in the future due to its business model.
Acquisitions and partnerships are a longer-term goal for Rocket, the CEO said, adding that partnerships with Morgan Stanley and E*Trade clients will be very beneficial for Rocket in the future.
Farner also mentioned a special dividend that was announced Thursday and said it’s the right move to return to the shareholders while there are no acquisitions in process for the company.
Mortgage rates surge higher in two weeks
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 2.97 percent with an average 0.6 point. (Points are fees paid to a lender equal to 1 percent of the loan amount and are in addition to the interest rate.) It was 2.81 percent a week ago and 3.45 percent a year ago. The 30-year fixed average has risen 24 basis points in the past two weeks. (A basis point is 0.01 percentage point.)
Higher mortgage rates are a good thing, it means that the economic picture is getting brighter. While unemployment still remains higher than it was before the pandemic, the anticipation that the economy will heat up later this year has caused bond yields — seen as a benchmark for interest rate movements — to spike. The 30-year fixed mortgage rate typically moves with the 10-year Treasury rate.
Recent increases in mortgage rates may cool off homebuyer interest, but they set a hard deadline for those considering refinancing. As a result of higher rates, refinance activity fell 11% last week to its lowest level since December 2020, but still remained 50% higher than a year ago, according to MBA.