As the mortgage industry continues to see some mixed signs—rates rising and falling, applications decreasing and so on—Rocket Companies continues to find success, as reported in their Q3 2024 earnings report and call.
Rocket reported a total revenue of $647 million and an adjusted revenue of $1.323 billion for Q3, which the company said exceeded the “high end of our guidance range.” To be specific, back in Q2, Rocket executives stated they expected to see an adjusted revenue between $1.15 billion to $1.3 billion. This is also a 32% increase year-over-year.
Rocket also reported $28.5 billion generated in closed loan origination volume, up from $24.7 billion in Q2 and a 28% increase year-over-year. The company’s servicing portfolio unpaid principal balance came in at $546.1 billion, or 2.6 million loans serviced.
The Q3 earnings report marks three out of three quarters so far for 2024 where Rocket Companies has seen success. It previously saw an outstanding Q1 with $1.2 billion in revenue, which continued into a strong Q2 with another adjusted revenue of $1.2 billion.
The consecutive wins in 2024 also follow a strong finish to 2023 with an adjusted revenue of $885 million in Q4 2023 and $3.8 billion for the full year of 2023.
Rocket CEO Varun Krishna said that “despite the housing market being challenging, we are seeing signs of rejuvenation.” He pointed out that mortgage rates have come down from when they were nearing 8% in 2023, and that housing inventory has increased from 3.4 months to 4.3 months—a 26% improvement.
“While affordability and inventory are certainly still challenges, the market is showing signs of improvement compared to last year, and we’re right there with consumers navigating their needs together and in service of our mission to help everyone home,” he continued. “Our mindset reflects the importance of optimism in a world that continues to be riddled with uncertainty. That is because homeownership is and always will be the cornerstone of the American Dream.”
Rocket executives pointed to the growth of their AI technologies for their continued success. Krishna specifically called out their new technology Navigator—their internal AI driven knowledge and workflow platform—as a large proponent of Q3’s success.
“Navigator empowers our team members to create no code apps, experiment with AI, securely summarize documents, analyze sentiment and even role-play scenarios. Navigator’s AI automates complex queries, empowering more people to drive innovation on their own without involving support from a data analyst or engineer,” Krishna explained. “With Navigator’s conversational AI interface, our team now has the answers they need at their fingertips, and the results are impressive.”
Executives also noted that the company’s efforts in increasing affordability have also been successful, contributing to more growth in the market and more growth in the company. One such effort is Welcome Home RateBreak, a lender-paid 2-1 temporary buydown program that Rocket introduced back in August.
“We reduced rates by two points in the first year and one point in the second, providing meaningful affordability relief for homebuyers,” said Krishna. “Since its launch in late August, we’ve seen our OnePlus and Welcome Home RateBreak product groups grow by more than 20%.”
Looking toward Q4, Rocket Companies executives stated they expect adjusted revenue between $1.05 billion to $1.2 billion. This is a slight decline from previous quarter’s expectations, due to an expected decline in market activity.
