Rising inventory levels and changing buyer demographics are boosting optimism for the housing market in 2025 even as affordability headwinds carry into the new year, Rocket Companies CFO and Treasurer Brian Brown said during a fireside chat at the Goldman Sachs U.S. Financial Services Conference on December 10.
“We’re seeing inventory tick up,” Brown told attendees, adding that housing inventory is north of four months’ supply, which hasn’t happened in a while.
“For the first time ever, we’re seeing more homes starting to sell for the list price, which is huge because the tale of the past 18 months has been a really competitive process with multiple offers, sometimes cash buyers winning out.”
Despite forecasts for mortgage rates to stay elevated in the 6% range, Brown noted that there’s plenty of pent-up demand from buyers waiting on the sidelines for the right time to act.
“Consumers want to buy homes; that is not the problem,” Brown said. “Our pipeline of people that are interested in buying homes is actually bigger than it ever has been in the history of the company. Getting those clients into homes remains a challenge—and that’s largely because of inventory.”
First-time homebuyers are showing particular resilience in the current market. Brown explained their unique position.
“The reason why the first-time homebuyer is really interesting is because, yes, just like everyone else, they have affordability concerns. But remember, they’re not trading a 3% rate for a 6% or 7% rate. Their comparison point, the more appropriate comparison point, is what are they paying in rent in terms of their monthly cash flow.”
Looking ahead to 2025, Brown cited Fannie Mae’s forecast of approximately $1.9 trillion in mortgage originations—up about 20% growth over 2024. Specifically, he pointed to Fannie Mae’s forecast calling for a 10% bump in purchase originations and refinances up as much as 40% to 50%. However, Brown said he thinks the purchase forecast might be a bit conservative.
From a demographic standpoint, Rocket is seeing notable changes in the groups driving demand for homes.
“Female head of households is one of the fastest growing segments,” Brown said. “Black and Brown communities, Hispanics continue to grow in terms of total population and the demographics of the United States, but also in terms of homebuying, and they’re in some cases looking for a much different experience.”
These changing demographics are reshaping the company’s approach to the market. “Meeting these consumers where they’re at and being their home loan provider of choice is extremely important,” Brown said, stressing the need for tailored service to different buyer segments.
Overall, Brown remained fairly optimistic about the market’s direction, even with the dual headwinds of higher rates and home prices.
“If I kind of take a step back and I look at inventory, I don’t know exactly where rates will go. So I’m not exactly sure about affordability,” he said on the call. “But I look at inventory and I look at demand. We’re starting to see some things cooperate that get us really excited about 2025.”
Detroit-based Rocket Companies is a fintech platform that includes several personal finance and consumer technology brands, including Rocket Mortgage, Rocket Homes, Amrock Title and Settlement Services, Rocket Money and Rocket Loans. In the third quarter of 2024, the company generated total revenue of $647 million and adjusted revenue of $1.323 billion.
