Rocket Companies CEO Jay Farner in an appearance on CNBC on Wednesday credited the mortgage lender’s investments in technology for its record quarter it reported the day prior.
The Detroit-based company, which began trading on the public market in August, posted triple-digit loan volume in the third quarter amid a low interest rate environment spurred by the coronavirus pandemic.
“It’s all about our platform,” Farner said in an interview with “Mad Money” host Jim Cramer. “That platform allows us to scale.”
Rocket, which focuses on technology to drive real estate deals, pumped about $500 million into its platform in the past year, he said. The company, parent of Quicken Loans Inc, does business through its Rocket Mortgage, Rocket Homes and Rocket Auto brands.
In the third quarter that ended in September, Rocket recorded $89 billion in closed loan volume, up 122% from a year ago when the U.S. was enjoying a strong economy. The strong performance comes amid a low interest rate environment that has powered a home-buying spree over recent months. Demand driven by low rates has pushed home prices up.
Mortgage data show that homebuying demand last week slipped to its lowest level in half a year, though application rates remained more than double digits higher than levels from a year ago.
“We were doing about $15 billion a month at the start of the year and in October we did over $30 billion in one month in closed volume, and that’s just that technology combined with the great brand we’ve got,” Farner said.
Rocket, the nation’s largest mortgage lender by volume in 2019, posted $4.7 billion in revenue for the quarter, up 163% from the year-ago quarter. The company also posted $1.21 in adjusted earnings per share.
Shares, however, dipped 2.5% in Wednesday’s session. The closing price of $21.06 is up 17% from its first trade on the market in July.
Farner reiterated his company’s plans to capture 25% of the mortgage market by 2030, citing partnerships it has rolled out with Realtor.com, Intuit and a forthcoming partnership with an unnamed “major large financial institution” next year. The company claims to have at least 9% of the market.
“We’ve got all kinds of kinds of upside here,” he said. “The upside here for us in terms of how this business is going to grow, we see 25% [mortgage market share] here by 2030.”