Rocket CEO says U.S. mortgage industry is a ‘tale of two cities.’ His booming business shows a broader reality for American homebuyers

For the past couple of years, the housing market has been a touchy subject for many Americans. As both mortgage rates and home prices remained elevated far above pandemic levels, many lost hope in the American dream of homeownership, and younger generations gave up on the idea altogether.

But the CEO of Rocket Companies, whose flagship subsidiary is Rocket Mortgage, said this week there are signs Americans are moving off the sidelines and vying for homeownership. Coming at the heels of mortgage rates dropping just slightly below 6%, Rocket CEO Varun Krishna told CNBC the company is poised to have the highest mortgage loan production volume and highest gain on sale in four years.

Rocket’s current success differs vastly from what’s happening in the mortgage industry more broadly. While the Detroit-based lender rides a wave of renewed demand, PennyMac, a major U.S. mortgage lender and servicer, faces a slower and more painful reset. 

“The way I would describe this last quarter is very simple: It’s a tale of two cities,” Krishna said. “When you look at the past quarter, mortgage rates dropped to the...