Is Rocket Mortgage CFO Brian Brown Blowing Smoke To Make Rocket Mortgage Look More Profitable Than It Is?
Rocket Mortgage CFO Brian Brown says first-time homebuyers will drive the housing market in 2023.
Brown made his prediction during a one-on-one conversation with Fitch Ratings Director Shampa Bhattacharya. Brown speculated that first-time home buyers will drive purchase volume in 2023. Why? He believes that first-time home buyers will actually benefit from the 5% dip in sales prices.
Brown told Bhattacharya that Rocket is banking on a continual deterioration in the non-bank sector.
The Rocket CFO also stated that he expects the industry to generate $1.7 to $1.9 trillion in 2023.
Brown added that Rocket is in good position to ride out the downturn.
Brown dodged a direct answer if profitability is Rocket’s goal or the company’s expectation. He stated that Rocket Companies is focused on right-sizing with a target of $2 billion in cost reductions to maintain cash flow and liquidity.
Brown said he expects Rocket to make it through 2023. He stated the company has improved it’s liquidity and income channels. However, he expects more job losses through the first two quarters of the year.
Brown also stated that the final key to getting through a difficult market will be consolidation. He noted that the industry can’t sustain the current trend of loan originators closing one loan a month on average.
However, Brown added that he doesn’t expect Rocket to be a buyer. even in a buyer’s market. Does this mean Rocket Mortgage could be for sale?
Bhattacharya asked Brown what the current market looks like compared to 2008. He responded in a vague upbeat answer saying that there are challenges and opportunities in the current market.
They include a 5% predicted decline in housing prices. In addition, he said loans today are much more secure than those leading up to the financial crisis.