Quick Read
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Rocket Companies stands to gain most from falling rates because its refinancing pipeline responds faster than Zillow's ad platform or Compass's home-sale commissions.
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Opendoor is down 68% YTD and UWM Holdings slipped 0.6% today, giving back a fraction of its 32% monthly surge and bucking the broader housing rally.
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Varun Krishna says Rocket Companies now profits at rates that caused losses three years ago, with $100M in Mr. Cooper cost savings arriving a year ahead of schedule.
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Rate-sensitive housing stocks are rallying as Treasury yields retreat, and Rocket Companies( NYSE:RKT ) is out in front. Rocket Companies stock is at $13.96, up 9%, in late-day trading. The gain adds to a climb that began after the company's October 29 third-quarter report, though the stock is still down 28% year to date (YTD).
Long-term Treasury yields fell sharply alongside lower oil prices, and mortgage rates tend to follow those yields lower. Cheaper mortgages support home sales, refinancing and real estate commissions, which helps explain why lenders, brokerages and listing platforms are rising together. The 10-year Treasury yield stood at 4.98% on October 29, down from 5.05% on October 28. Both are the most recent official readings and come from before the current move.
Rocket Companies Has the Most to Gain From Rate Relief
Rocket Companies reported its Q3 2026 results on October 29, with adjusted earnings per share (EPS) of $0.15 beating the consensus estimate of $0.1367. Net income at the company reached $709 million, helped by a $710 million favorable change in the fair value of its mortgage servicing rights (MSRs). That gain is a noncash item tied to valuation assumptions. Excluding it and other items, the lender's adjusted net income came to $419 million.
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Management at Rocket Companies said the 30-year fixed mortgage rate rose from 6.4% at the start of the quarter to 7.3% by the end of September. Looking ahead, Rocket Companies laid out Q4 guidance. It guided adjusted revenue to $2.1 billion to $2.3 billion and expects the refinance market to decline by almost half from Q3. That outlook leaves the stock especially sensitive to any break in rates.
Speaking on the October 29 earnings call, Rocket Companies CEO Varun Krishna described a business built to make money even at high rates. Krishna put it simply: "Three years ago, at these rates, we lost money. Today, we make it. The rates didn't change, we did." On the cost side, Rocket Companies expects to capture the remaining $100 million of its $400 million in annual Mr. Cooper expense savings in Q4, a year ahead of its original timeline.
How Compass and Zillow Stack Up Against Rocket Companies
Compass( NYSE:COMP ) stock is at $9.73, up 8%. The brokerage has climbed 10% over the past month. Because Compass makes commissions when deals close, its link to rates runs through home sales, a slower channel than Rocket Companies' refinance pipeline.
Meanwhile, Zillow Group( NASDAQ:Z ) stock is at $33.37, up 8%. Even with the gain, the stock is down 51% YTD, a far deeper decline than Rocket Companies has taken. Ahead of its next earnings report, Zillow is counting on a fast-growing mortgage arm to help offset a soft housing market.
At the same time, Opendoor Technologies( NASDAQ:OPEN ) stock is at $1.86, up 3%. The iBuyer is still down 68% YTD. UWM Holdings( NYSE:UWMC ) stock is at $1.56, down 0.6%, moving against Rocket Companies. After climbing 32% over the past month, UWM is giving back a sliver of that gain.
Three Business Models, One Rate Trade
Rocket Companies makes and services mortgages directly for consumers, earning gain-on-sale revenue when loans close and ongoing fees from its servicing book. Compass collects commissions on brokerage transactions and adds franchise fees plus title, escrow and mortgage services, while Zillow makes money from agent advertising, a rentals marketplace and a growing mortgage business through Zillow Home Loans.
That mix means falling rates could flow into Rocket Companies' refinance volumes first, while Compass and Zillow depend more on purchase activity picking up.
What Comes Next for the Housing Rate Rally
Rocket Companies now faces the question of whether mortgage rates keep falling long enough to revive refinance demand in a seasonally slow fourth quarter. A leaner cost base and a large servicing book could turn modest rate relief into stronger results, while Compass and Zillow may gain if buyers return. Existing home sales ran at a 3.99 million annualized pace in September, a level that still points to a soft market.
On the other hand, a rebound in yields could quickly erase the rally, and each company carries its own risks. Rocket Companies is still integrating Mr. Cooper, Compass is absorbing Anywhere Real Estate, and Zillow faces Federal Trade Commission (FTC) antitrust litigation. Investors may want to wait until the direction of mortgage rates resolves before investing.
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