Rocket CEO discusses the impact of $11 billion acquisition frenzy and Trump tariffs on housing
Rockets (RKT) CEO Varun Krishna made spring spending.
Rocket made its second major acquisition this month on Monday as it appears to have gained a share in the fragmented mortgage services industry.
The company will acquire mortgage service Mr. Cooper (COP) for $9.4 billion in stock. The combined company will serve more than $2.1 trillion in loan volumes. Mr. Cooper has 7 million customers.
“Our vision is that we are building a comprehensive homeowner platform,” Krishna said on Yahoo Finance’s Fortune. “We want to get the full experience of home ownership, from home search to origin to service, seamless and frictionless.”
Rocket expects the deal to generate annual running interest rate revenue with a cost synergy of about $500 million. The deal is expected to rejoin Rocket’s business after it closes later this year.
Rocket Stock fell 9.5% in afternoon trading.
Earlier this month, Rocket said it would buy popular real estate brokerage and home data site Redfin (RDFN) for $1.75 billion. The transaction is believed to enhance Rocket’s staking initiation business.
After the merger, Krishna invested more than $11 billion this month. Rocket’s share price rose in both transactions.
As of 2:55:45 pm ET. The market is open.
That didn’t shake Krishna.
“We are very happy with the stories of investors and shareholders. We are building a company that has been passed down from generation to generation,” Krishna said.
Rocket’s transaction volumes are critical for the U.S. housing market as buyers continue to deal with increased mortgage rates. But mortgage rates are not at their highest point – a window to improve demand trends is opened during the spring buying season.
New home sales rose 1.8% in February, with a seasonally adjusted annual rate of 676,000. Sales rose 5.1% year-on-year. Sales were higher in January.
Read more: What is the best time of year to buy a home?
In the spring of this year, wildcards in the housing market are tariffs from the Trump administration. Not only can they increase the cost of building a home, but they can also prompt a tax cut from the Federal Reserve.
“When you think about things like tariffs and inflation, it’s a little earlier. I think a lot of people are guessing,” Krishna said. “We’re seeing some very positive green shots. We’re seeing inventory. We’re seeing more homes selling on or under the list,” he said. [price]. We cannot see the competitive bidding momentum that existed in the past. We know that the mortgage-initiated market this year will be about $1.9 trillion, 10% to 15% higher than last year’s mortgage market. So what we see is actually positive. ”
