- MemberAugust 10, 2020 at 10:50 am
Hi Chris. I think I bring a good perspective because I currently work in the mortgage business. I work for a small/mid size mortgage company. I am bullish on the industry as a whole right now because of what is going on with interest rates and some other factors. The Fed is continuing to buy mortgage backed securities so mortgage interest rates have dropped and will remain low in the short to mid-term. This has caused a refinancing boom. Almost every homeowner should be looking into refinancing and this should last at least another 6 months. Also demand for homes remains strong. Partly because of the pandemic and people wanting to buy their own place instead of renting, but also, millennials (I am a millennial myself, just an FYI) are getting serious about home ownership. The one issue to home purchases is inventory of homes for sale. Every market is different, but most cities don’t have enough home supply to meet the demand. This is why home prices are so high right now in some markets. We are setting sales records right now for the company I work for, so I imagine it is similar for all mortgage companies. Good purchase volume and refi’s are booming. On top of this, one advantage I think $RKT has is their app and technology. I think the industry as a whole is trending to fully digital mortgage process and I think most companies will be playing catch up to $RKT. With all that said, I’m not buying $RKT right now because it is an IPO and I’d like to see how things shake out a bit. I also haven’t checked out their financials yet either. I would also suggest keeping an eye on mortgage rates. If rates start to creep up, that wouldn’t be good for the industry as a whole. If you are interested in another mortgage industry play, I would check out $PFSI. I have a small position in $PFSI and would love to her your overall thoughts. They just crushed earnings. Sorry for the long message, just thought I could bring some good insight.