Why Rocket Companies Stock Jumped Today

What happened

Shares of Rocket Companies (NYSE: RKT) leapt 12.4% on Monday, fueled by a buoyant housing market and rising demand for mortgage-related services.

So what

On Friday, a report from the National Association of Realtors showed that sales of existing homes in July surged 9% year over year and 24% compared to June. The housing market is being supported by historically low mortgage rates, which fell below 3% for many borrowers in July. More new home sales mean more mortgage originations -- and more business for Rocket Companies. 

Miniature wooden houses are on top of rising stacks of gold coins.

A strong real estate market is fueling Rocket Companies' growth. Image source: Getty Images.

Low interest rates have also led to a surge in demand for mortgage refinancing. This, too, has been a boon for Rocket Companies. 

Now what

Rocket Companies announced preliminary second-quarter results on Aug. 14, and they were impressive, to say the least. The recent initial public offering (IPO) said its net revenue soared 437% year over year to $5 billion, driven by a 126% surge in loan origination volume, to $72.3 billion. 

Investors can expect to hear more about the state of the housing market from the nation's largest mortgage lender's leadership team during Rocket Companies' upcomingearnings conference call which is scheduled for Sept. 2 at 4:30 p.m. Eastern time. 

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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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