Low-interest rates generated more profit for Quicken Loan parent Rocket Companies

Quicken Loans parent Rocket companies announced their third-quarter results on Tuesday reporting net income of nearly $3 billion on $4.6 billion in total revenue. The profit is due to the low-interest rates. The mortgages volume has been doubled than the year-earlier and it was $89 billion for the reported quarter.

Due to the pandemic lenders like Quicken Loans businesses flourish because of the low-interest rates which forced borrowers to refinance loans. Last week the interest rate on a 30- year fixed-rate was just 2.78%.

The Rocket CEO Jay Farner said in a statement that the company helped extraordinary numbers of Americans to buy and refinance their loans during the tough economic conditions, resulted from the pandemic.

The company is also buying back $1 billion of its stock. The forecast for the next year is that the market will shift its focus from refinances to predominantly home purchases. The company did not say anything about how much of its business is refinances compared to home purchases.

The Rocket was listed on the New York Stock Exchange on Aug. 6 at $18 a share. The Low-interest rates generated more profit for Quicken Loan parent Rocket Companies

Quicken Loans parent Rocket companies announced their third-quarter results on Tuesday reporting net income of nearly $3 billion on $4.6 billion in total revenue. The profit is due to the low-interest rates. The mortgages volume has been doubled than the year-earlier and it was $89 billion for the reported quarter.

Due to the pandemic lenders like Quicken Loans businesses flourish because of the low-interest rates which forced borrowers to refinance loans. Last week the interest rate on a 30- year fixed-rate was just 2.78%.

The Rocket CEO Jay Farner said in a statement that the company helped extraordinary numbers of Americans to buy and refinance their loans during the tough economic conditions, resulted from the pandemic.

The company is also buying back $1 billion of its stock. The forecast for the next year is that the market will shift its focus from refinances to predominantly home purchases. The company did not say anything about how much of its business is refinances compared to home purchases.

The Rocket was listed on the New York Stock Exchange on Aug. 6 at $18 a share. The price increased significantly, and it closed on Thursday afternoon at $21.60 just before the announcement of its buyback program.

The Rocket’s Chief Financial Officer Julie Booth said that the buyback option gives us the flexibility to take advantage of opportunities if we believe the market is undervaluing our business and the company is committed to giving more long-term value to our shareholders by using our substantial cash generation.

Rocket’s stock does not pay a dividend to its shareholders and buyback is a reward for the shareholders who hang longer onto shares.

 

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