Rocket Companies (RKT) shares tumbled 10% Wednesday, a day after the online financial platform badly missed revenue estimates and gave soft guidance as the housing market continued to be squeezed by high borrowing costs.

The mortgage provider's revenue plunged 46% year-over-year to $647 million, about half of what analysts surveyed by Visible Alpha had expected. Adjusted earnings per share (EPS) of $0.08 was in line with forecasts. 

The revenue decline came despite Rocket's net rate lock volume jumping 43% to $29.8 billion. Gain on sale margin increased 2 basis points (bps) to 2.78%. However, that was down from 2.99% in the second quarter.

CEO Calls Housing Market 'Challenging'

"Over the past few months, the market has thrown our industry almost every curveball imaginable," Chief Executive Officer (CEO) Varun Krishna said in the company's earnings call, according to a transcript provided by AlphaSense. "With inflation easing, the Fed cut rates for the first time in four years. But in an interesting twist, while the Fed lowered rates, mortgage rates did not follow suit."

Krishna called the housing market "challenging."

Chief Financial Officer (CFO) Brian Brown added, "We anticipate the mortgage market in the fourth quarter to be smaller than the third quarter."

The company sees current-quarter revenue in a range of $1.05 billion to $1.20 billion. The Visible Alpha estimate was $1.18 billion.

The news sent shares of Rocket Companies into negative territory for the year.