Rocket Mortgage Acquires Mr. Cooper Group in $9.4 Billion Deal

The combined company will service more than $2 trillion worth of mortgages.

A "For Sale" sign is posted in front of new house, in this file photo. (Billion Photos/Shutterstock）

Rocket Mortgage, an online home-loan originator, is purchasing mortgage-servicing company Mr. Cooper Group in a $9.4 billion deal.

Following the acquisition, Rocket will represent one in every six mortgages in the United States and welcome approximately 7 million clients to the fold, servicing more than $2 trillion worth of mortgages, the company said in a release. Rocket expects the deal to bolster loan volume, generate more recurrent revenues, and lower client acquisition costs.

“By combining Mr. Cooper and Rocket, we will form the strongest mortgage company in the industry, offering an end-to-end homeownership experience backed by leading technology and grounded in customer care,” Jay Bray, the CEO and chairman of Mr. Cooper, said in a statement.

Bray will become president and CEO of the Detroit-based Rocket Mortgage. The merged company will maintain 11 board members; nine from Rocket and two from Mr. Cooper.

Shares of the Texas-based Mr. Cooper rallied 14 percent on the news, while Rocket tumbled nearly 10 percent.

Rocket prices Mr. Cooper’s stock at $143.33 per share as part of the deal, representing a 37 percent premium from its March 28 closing price. In addition, when the deal is completed, the combined company will give Mr. Cooper’s shareholders 11 shares of Rocket for every share of Mr. Cooper.

The deal is scheduled to close in the fourth quarter of 2025.

Rocket has been attempting to build an ecosystem for prospective homeowners, streamlining the buying process, from searching for properties to securing a mortgage.

On March 10, Rocket announced it was purchasing online platform Redfin for $1.75 billion to enhance the buying and selling experience in the real estate market.

“Together, we will improve the experience by connecting traditionally disparate steps of the search and financing process with leading technology that removes friction, reduces costs and increases value to American homebuyers,” said Varun Krishna, the CEO of Rocket Companies, in a statement.

According to a March 2024 report by Fitch Ratings, consolidation and the exit of smaller firms have led to large non-bank mortgage lenders gaining greater market share in the $12.6 trillion mortgage industry—a trend that will likely persist.

“Low origination volume and pressured gain-on-sale margins have materially weakened unit economics, leading many originators to exit the market, with additional consolidation expected to occur as profitability remains constrained by the challenging environment,” Fitch said.

Rocket’s buying spree comes as the U.S. real estate market is witnessing returning buyers.

Buyers Coming Back

In February, reports signaled that homebuyers are getting off the sidelines and dipping their toes in the real estate market.

Existing home sales surged by 4.2 percent, new home sales increased by nearly 2 percent, and pending home sales climbed by 2 percent month-over-month.

This comes as housing inventories have loosened and mortgage rates have gradually declined.

According to data from ResiClub Analytics, in February, the number of unsold, finished new single-family homes reached the highest level since the summer of 2009.

For the week ended March 27, the average 30-year fixed-rate mortgage was 6.65 percent, down about 40 basis points from the mid-January peak and below the 52-week average of 6.74 percent.

“Recent mortgage rate stability continues to benefit potential buyers this spring, as reflected in the uptick in purchase applications,” said Sam Khater, the chief economist at Freddie Mac, in a statement.

Despite the positive momentum, housing affordability remains a challenge for households.

A new report by Bankrate found that Americans must earn about $117,000 annually to afford a median-priced home, up 50 percent from 2020.

“These numbers show the dramatic rise in home prices over the past five years, and the tightening affordability squeeze facing first-time buyers,” said Jeff Ostrowski, a housing market analyst at Bankrate, in a statement to The Epoch Times.

“For many buyers, homeownership feels like it’s moving farther out of reach. Unfortunately for buyers, it seems unlikely that either home prices or mortgage rates will fall dramatically in the near future.”

The national median asking price is $425,000, up more than 6 percent from a year ago, Redfin data show. The median sale price is $384,000, 3 percent higher than last year. Monthly housing payments recently hit a record high of $2,807.