By Telis Demos

Springtime may be just around the corner for homebuyers, according to mortgage giant Rocket Cos.

Shares of the Detroit-based lender were up about 7% midday Friday following the company's earnings report late Thursday.

Rocket gave a revenue forecast range for the first quarter of 2025 with a midpoint that was a tad below what Wall Street was anticipating, according to estimates compiled by Visible Alpha. However, executives also told analysts on Thursday's earnings call they were seeing signs in the market of better times ahead.

"You're seeing more homes selling at or below list. You're seeing [home] equity at an all-time high ... You're seeing new listings increase," Chief Executive Varun Krishna said. He noted that January's jump in listings was the biggest in three years.

Rocket Chief Financial Officer Brian Brown added that the percentage of prospective home-buyers who had been fully underwritten-meaning they were approved to borrow, and just needed to find a place to buy-was growing as a percentage of Rocket's overall buyer pipeline. "So some really nice green shoots leading into March," he said.

It is no wonder investors are seizing on this optimism. Housing remains in a deep winter slump, with the National Association of Realtors' pending home sales index hitting an all-time low in January. Last year's sales were the lowest in almost three decades.

Homeowners might not be too thrilled to hear about those below-listing sales. But sellers' capitulation would be good news for the transactions business.

Rocket shares had, surprisingly, been falling this week prior to Friday. That was despite the sharp drop in 10-year Treasury yields, which typically heralds falling mortgage rates and, in turn, more homebuying activity. While many homeowners on the cusp of selling might have mortgage rates that are still far below today's prevailing rates, it is still encouraging that rates hit another 2025 low this week in Freddie Mac's national average for 30-year fixed rate mortgages, at 6.76%.

More thawing in sellers' willingness to take what's offered could be what the market really wants to see.

This analysis comes from the Journal's Heard on the Street team. Subscribe to their free daily afternoon newsletter here.

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(END) Dow Jones Newswires

February 28, 2025 12:05 ET (17:05 GMT)

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