Rocket Cos., OpenDoor and Other Home-Buying Stocks Fall Following CPI Report
$Rocket(RKT.US$, $Opendoor Technologies(OPEN.US$ and other real estate-related stocks sank on Wednesday as a hot U.S. inflation report dampened hopes for lower mortgage rates.
Rocket – the parent firm of popular housing lender Rocket Mortgage Co. – fell 10.9% to $12.57 shortly before noon ET, while rival mortage firm $LendingTree(TREE.US$ shed 4.3% to $39.31.
OpenDoor, which operates a digital platform for home sales, likewise tumbled 10.4% to $2.46.
The stocks fell after the U.S. Labor Department reported before the bell that the March Consumer Price Index – which measures retail inflation – rose 3.5% year over year. That exceeded the 3.4% that many economists had predicted.
The stronger inflation reading pushed the $U.S. 10-Year Treasury Notes Yield(US10Y.BD$ up 13.9 basis points to 4.505% shortly before noon ET.
U.S. 30-year-fixed home-mortgage rates traditionally move in lockstep with the 10-year yield, so they're likely to rise from the already historically high 7.06% average that Bankrate.com put them at earlier Wednesday. Higher mortgage rates traditionally put a strain on U.S. home sales.
The hot CPI report also hurt homebuilder stocks, although not as dramatically as some mortgage-related ones. For example, $Lennar Corp(LEN.US$ fell 4.6% to $158.33 shortly before noon ET, while $KB Home(KBH.US$ gave back 4.4% to $64.07.
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10baggerbamm : rocket is a great company they've been around over 25 years they are interest rate sensitive let's be realistic the refinance of properties of existing customers is a big percentage of their revenue and it is basically non-existent at this point they just like all of the other lending institutions that are not only in a position to drive revenue from purchases but refinances require rates to fall in order for institutional buying to take place.. so keep it on your screen and when pal signifies he's going to cut rates you buy it because it's not going to be a one and done event it will be multiple rate cuts over. about a year to a year and a half and rock it will be one of the main benefactors
73903847 : awesome!
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10baggerbamm Maniac Fool : and if you would have listened when I posted it initially and bought it you'd be at a nice profit right now wouldn't you