Did the nation's second-largest mortgage lender stay in the black?
Rocket Mortgage’s parent company, Rocket Companies, has reported continued profitability in the face of elevated mortgage rates.
The Detroit-based company announced a net income of $178 million on $1.3 billion in revenue for the second quarter of 2024.
While down slightly from the first quarter’s $291 million net income on a $1.38 billion revenue, the Q2 figure marked a significant improvement over the same period last year. Rocket Companies also stayed in the black for the first half of 2024, with a net income of $469 million, compared to a loss of $272 million for the same period in 2023.
The company’s gain on sale margins stood at 2.9%, a slight decrease from the first quarter but up from 2.7% a year earlier.
“Our team achieved impressive results in Q2,” Rocket CEO Varun Krishna said in the company’s financial report. “We, again, grew our purchase market share year-over-year by making continuous improvements across our processes, teams, marketing and technology. We also delivered year-over-year top-line growth for the fourth straight quarter and expanded profitability for the fifth quarter in a row.”
Rocket’s mortgage servicing portfolio reached $534.6 billion as of June 30, 2024, covering 2.6 million loans. The portfolio generates around $1.4 billion in annual recurring servicing fees. The company also invested $315 million in acquiring mortgage servicing right (MSR) portfolios, adding $20.8 billion in unpaid principal balances.
Additionally, Rocket has been investing in artificial intelligence.
The company rolled out its AI-powered live chat across the customer journey, claiming a threefold increase in conversion rates compared to traditional methods. Rocket Logic Assistant, another AI tool, is now being used by the entire banking team to transcribe calls, automate applications, and improve productivity.
“With our AI-fueled homeownership strategy, and by helping our clients overcome obstacles to achieve their dreams, we are making the homeownership experience easier and more accessible for all,” Krishna said.
Rocket Companies is the nation’s second-largest mortgage lender. Rocket’s stock closed at $15.36 per share on Thursday.
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