Mortgage Rates Hit 6.95%, Pushing Rocket Stock Near 52-Week Low
Freddie Mac reports 30-year rates at 6.95%, raising monthly loan costs and pressuring Rocket Companies shares near yearly lows.
Key points
- Freddie Mac’s 30-year mortgage rate rose to 6.95%, increasing monthly payments on a $400,000 loan by approximately $51.
- Rocket Companies stock declined 2.2% to $12.46, remaining only 2.7% above its 52-week low of $12.13.
- The company reported second-quarter revenue of $2,784 million and net income of $229 million, despite facing higher borrowing costs.
Freddie Mac reports the 30-year mortgage rate reached 6.95% on September 23. This marks a one-week increase of 19 basis points. The change raises the cost of borrowing for American households.
Rocket Companies stock fell 2.2% to $12.46 during the session. The share price sits just 2.7% above its 52-week low. The market reflects the immediate pressure from higher interest rates.
Rising Rates Increase Monthly Loan Payments
A standard $400,000 loan now costs about $2,648 per month. That is roughly $51 more than the previous week’s payment. The increase reduces the affordability of new home purchases.
The current rate is 69 basis points higher than a year ago. Refinancing activity slows as existing borrowers lock in lower costs. Lenders face a direct reduction in new loan demand.
Rocket Companies Faces Revenue Pressure
Rocket reported $2,784 million in total revenue for the second quarter. This represents a 91.9% increase compared to the same period last year. The company also recorded $229 million in net income.
Management cited record market share in purchase and refinance loans. Originations reached $49.1 billion during the quarter. However, higher rates threaten this volume in coming months.
Analysts Maintain Diverse Valuation Targets
MarketBeat shows an average analyst target of $19.57 for Rocket. This implies 57% upside from the current $12.46 price. Individual targets range from $14 to $20.
Rocket holds $11.2 billion in liquidity for operational stability. Its $2 trillion servicing portfolio provides ongoing cash flow. These assets offer a buffer against temporary demand drops.
