May 10: Diamonds & homes; Rocket Cos.' stark earnings; STRATMOR Tech Survey; Car insurance & tariffs; Vendor news & products
As noted earlier this week in the Commentary, builders report that the number of unsold homes is the highest since 2009, and in Sunbelt MSAs, new homes are facing a lot of competition from existing homes coming onto the market. AIE writes that active listings are up 34 percent year-over-year. Per the Wall Street Journal, homebuilders are increasing the use of incentives to entice buyers. Unsold inventory isn’t restricted to builders. De Beers, the diamond mining colossus, is currently sitting on a $2 billion stockpile of unsold diamonds. This has been understandably frustrating for the company, which is blaming the increasing popularity of lab-grown diamonds for its troubles. People have become more accustomed to buying shiny rocks from labs rather than mines, and Walmart said that sales of lab-grown diamonds are up 175 percent last year compared to 2023. De Beers itself tried to get some action in the trend with Lightbox; a fashion jewelry label introduced in 2018 when synthetic diamonds were about 10 percent cheaper than mined diamonds. However, now that synthetics are about 90 percent cheaper than mined diamonds, De Beers is skittish and announced this week that they’re killing off the Lightbox brand altogether.
The market from a vacation area real estate agent’s perspective
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The “herd” is spooked out there. You may argue that people don’t vote with their pocketbook, but… “The spring season, when builders sell 40% of their product, is a dud and that’s before tariffs. The number of completed but unsold homes is at their highest since 2009, and months of supply are at 8.3, a level usually associated with recessions. Worse, existing inventory is also rising. Unsurprisingly, discounts during the first half of April averaged 7.2% of the sale price, up from 6.1% in January. Very abnormal.” Thus observed Dr. Elliot F. Eisenberg, Ph.D.
Tal Fletcher, from the Truckee/Lake Tahoe area bordering California and Nevada, addresses what he’s seeing out there. “As ski season wraps for most Tahoe resorts, April real estate closings represent the final sales of the winter cycle. In many ways, this moment may also represent the closing phase of a broader era defined by constrained inventory, stubbornly high interest rates, and resilient pricing.
“The economic volatility of 2025 has delivered mixed results year-to-date with high end sales soaring while mid-tier properties, those around the market’s average that are most sensitive to interest rates, have languished.
“The closing of ski season always kicks off a period of listing activity as some number of long-time homeowners come to the end of their useful life for Tahoe homeownership. The opportunity cost of their asset becomes tangible relative to the next phase of life in addition to an evaluation of any deferred maintenance, often resulting in a surge of new homes on the market, albeit at ambitious prices. This year, the seasonal phenomenon is likely to be compounded by the wave of sellers that were unsuccessful in selling last season as the election malaise robbed the market of momentum.
“Several indicators suggest that there are many promising indicators that summer will have conditions more favorable than buyers have experienced in a number of years. In addition to increased options amid greater supply, recent economic reports seem to have improved the probability of rate cuts that may, finally, deliver motivation for sellers to forgo comfortable 3% - 4% mortgages in favor of opportunities beckoning elsewhere.”
Car insurance costs and Trump Administration tariffs
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Homeowner’s insurance isn’t the only insurance costs grabbing headlines. Car insurance rates have been rather high, and are arguably due for a decrease, but personal auto insurers have essentially cut off the vast majority of requests to state regulators. In March, there were 482 requests to lower prices due to negative changes in personal insurance rates. However, in April, there were only 95 requests. The culprit will be familiar: since the main cost for insurers is repairing or replacing cars, a process that requires both new car parts and new cars, and since the current price for imported parts and cars is currently set arbitrarily in Washington, insurers are reluctant to reduce rates as they don’t know how much car parts will cost anymore. Given the reciprocal tariff proposal as of mid-April, the insurers estimated claims would cost $31 billion to $61 billion more with the tariffs.
Rocket Companies is/are not immune to taking a hit
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By some accounts, a profitable March for many lenders was not enough to make up for a dismal January and February. April saw some improvement, so at least the second quarter is off to a decent start for many.
Like UWM, Rocket Companies, Inc. is not immune to industry factors, and it will be interesting to see how the Redfin and Mr. Cooper purchases pan out. Rocket Companies, however, spans other industries in which most lenders are not directly invested. (Keep in mind that Rocket Companies, Inc. operates as a subsidiary of Rock Holdings Inc.) It operates through two segments, Direct to Consumer and Partner Network. The company offers Rocket Mortgage, a mortgage lender service that originates, closes, sells, and services agency-conforming loans, Rocket Close, an appraisal management, settlement, and title service, Rocket Homes, a home search platform and real estate agent referral network that provides technology-enabled services to support the home buying and selling experience, and Rocket Loans, an online-based personal loans business.
It also provides Rocket Money that provides financial wellness services, including subscription cancellation, budget management, and credit score, and Lendesk, a software service that provides a point-of-sale system for mortgage professionals and a loan origination system for private lenders.
Rocket Companies reported Q1 '25 GAAP net loss of $212 million, or $0.08 GAAP diluted loss per share and adjusted net income of $80 million, or $0.04 adjusted diluted earnings per share. The company had $1.3 billion in adjusted revenue, a year-over-year decline of 6.3%. EPS of $0.04 for the same period compares to $0.04 a year ago.
Here is how Rocket Companies performed. Rocket Mortgage had $21.6 billion in closed volume, a 7 percent year-over-year gain, with net rate locks up 17 percent to $26.1 billion. Gain on sale of loans, net: $771.63 million, better than expected and a year-over-year change of +10.4 percent. Interest income was a net of $28.05 million, higher than expected but down over 25 percent from the first quarter of 2025.
Like other servicers, the 2025’s 1st quarter was a tough one. Loan servicing income was a net -$48.49 million, far below estimates and a change of -112 percent year over year. Loan servicing income was $400.70 million, about the same as expected and +16 percent versus a year ago. Rocket saw its fair value of MSRs drop by $449 million in the 1st quarter, and its value was a year-over-year change of -895 percent. Yikes.
STRATMOR Technology Survey is underway
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The 2025 STRATMOR Technology Insight® Study is now underway. The first part of the study (the Lender Intelligence Survey) is live and focused on how lenders really feel about the tech they use every day. From LOS and CRM systems to underwriting automation and servicing platforms, this is the only independent study capturing lender experiences with mortgage tech systems and vendor support. Lenders who complete the survey will receive a summary report of 2025 Technology Insight® Study results at no cost. This is actionable intel to help guide tech decisions in today’s competitive environment. Take the survey and help shape the future of mortgage tech. The survey is open to lenders only. Questions? Reach out to STRATMOR’s Technology Insight team for details: technologyinsights@stratmorgroup.com
Vendor morsels
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Secure Insight and True Pay announced they've joined the enhanced Cowbell Rx cybersecurity marketplace, an offering that helps businesses enhance their cyber risk posture. As a trusted partner, they are now offering exclusive discounts and specialized solutions to Cowbell policyholders, helping them proactively manage cyber risks.
Sagent, a leading provider of mortgage servicing technology solutions announced the launch of its Dara Attorney Portal, the latest addition to Dara Default, to enhance efficiency between servicers and their attorney partners seamlessly integrating law firms and mortgage servicers. By enabling attorneys to manage foreclosure and default processes in a shared interface with real-time data, document management, and messaging, servicers can reduce costs and improve customer experience during the default lifecycle.
Fortune 500 company Intercontinental Exchange, Inc. (NYSE: ICE) announced that United Wholesale Mortgage (UWM) has signed a long-term agreement to license ICE Mortgage Technology’s industry-leading MSP® loan servicing system. “Selecting MSP for the system’s powerful features, scalability, and capacity to support outstanding customer service that fosters borrower retention will allow the nation’s largest mortgage lender, UWM, to bring its servicing operations in-house with a modern, comprehensive solution that streamlines the entire servicing process. UWM will deploy ICE Servicing Digital™, an intuitive homeowner portal with robust retention and recapture features that keep borrowers engaged through the life of a loan, and ICE Loss Mitigation, which fully integrates with Servicing Digital to help homeowners facing hardship connect with assistance.
Carrington Mortgage Services, LLC (CMS), one of the nation’s largest privately held non-bank lenders, boasts an impressive slate of loan offerings and services direct to consumers, investors, mortgage brokers and mortgage bankers nationwide. CMS’ mortgage lending group recently teamed up with Talk’uments, the first provider of interactive multilingual loan technology for the mortgage industry. The new digital language platform helps bridge the communication gap between borrowers and lenders by displaying essential mortgage disclosures, documents, and borrower communications in the customer’s language of choice. This includes the five most common non-English languages spoken in the United States: Spanish, Chinese, Korean, Vietnamese and Tagalog – with more to come.
Rate Portfolio moves beyond rigid income qualifications and traditional lending limitations, providing responsible financing solutions for self-employed individuals, freelancers, small business owners, property investors, and other well-qualified borrowers with non-traditional financial profiles. It’s a timely expansion: today’s workforce and investment trends show a clear shift away from standard According to recent data, investment purchases by small and mid-sized investors represented roughly 25% of U.S. home sales last year, demonstrating the growing need for products like Rate Portfolio Investor. Additionally, the self-employed and gig economy workforce is expanding faster than the overall labor force, requiring lenders to rethink how creditworthiness is evaluated.
Calyx celebrates its 35th anniversary in the business with PATH: The Industry's Most Advanced All-in-One Mortgage Platform. “Forged from Calyx’s legacy as the original LOS pioneer, PATH delivers unmatched speed, limitless scalability, and precision-driven efficiency, transforming how lenders compete in tomorrow’s mortgage landscape.
Cloudvirga, a Stewart-owned provider of digital mortgage technology, has just launched Tropos, a new borrower portal built to give lenders more control over how they engage borrowers digitally. “Many lenders today face a limited set of options for engaging with borrowers at the point of sale: they can use the free POS platforms bundled with their LOS (lightweight tools that often lack key features and offer little room for customization), or they can pay for expensive mobile app that don’t adapt well to operational complexity. Tropos was designed to offer a modular, customizable middle ground that fits lenders’ existing systems and workflows, including those outside mortgages.
Blend Labs, Inc. (NYSE: BLND), a leading origination platform for digital banking solutions, announced its first quarter 2025 financial results. Blend generated $20.1 million in cash provided by operating activities and $15.5 million in free cash flow, marking the first time in the company’s history to report positive free cash flow
Thank you to Dennis C. Smith who commented, “This could be me!” about this video detailing men’s memories.
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