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 lowest that they’ve been in the past three years, and Rocket was right there to capitalize.”

 But it also says something larger about the housing market today: While some current homeowners now have the ability to move and trade up for a more expensive or larger property—or as older generations feel more open to unlocking the golden handcuffs the housing market has restricted them with—younger generations are still largely left behind.

That “tale of two cities” today illustrates what American households are experiencing. For relatively higher‑income borrowers with strong credit, a modest decline in rates—into the low‑6% range—can be just enough to make a purchase feasible, especially if they already own a home and can tap equity to make a down payment purchase. Those buyers are the ones driving much of Rocket’s new activity, even as they trade the ultra‑low rates of the past for more expensive loans.

“The mortgage market is expected to grow by up to 25% existing home sales are expected to increase by up to 10%,” Krishna said.

But for many renters and hopeful homebuyers, the math still isn’t mathing. Home prices remain far above pre‑2020 levels—over 40% higher—and even with rates off their peaks, monthly payments on a median‑priced home ($427,000, according to Redfin) can easily outpace what a typical household earns ($83,000, Census data shows.

Younger Americans, in particular, face steeper down‑payment hurdles, higher student loan payments, and competition from cash buyers and investors of older generations. This all means a pick‑up in mortgage applications doesn’t necessarily translate into a broad improvement in housing affordability—although some economists and housing experts predict the market will become slightly more bearable this year. 

Lawrence Yun, chief economist for the National Association of Realtors recently said they’re anticipating a “little better” condition for more home sales this year as inventory levels increase and the “lock-in effect” steadily disappears. 

This is “because life-changing events are making more people list their property to move on to their next home,” Yun said in a statement. “[2026] should be better with lower mortgage rates, and that will qualify more buyers. We are expecting home sales to increase by about 14% nationwide in 2026.”

Why Rocket’s business model has been so successful recently

Much of Rocket’s recent success can be attributed to how its business model differs from PennyMac. 

While both companies originate and service mortgages, Rocket focuses on direct-to-consumer digital lending, handling more than half of its volume online without brokers. Rocket is also bolstered by heavy tech investment, AI-driven customer recapture, and diversification into real estate and personal finance, meaning they have more repeat customers. 

PennyMac, on the other hand, spreads risk across correspondent, broker, and consumer-direct channels, with a focus on government loans and non-agency securitizations. It partners with PennyMac Mortgage Investment Trust (its REIT) for capital-efficient mortgage servicing rights investments and third-party servicing, including delinquencies. In other words, PennyMac prioritizes scale over consumer-facing tech that could help them earn repeat business. 

“The key difference is that we retain our relationships with our clients because we connect servicing and origination at scale,” Krishna explained. “Something that’s very unique to Rocket is that we are the largest servicer and we are also the largest originator, but we help our clients transition from servicing to origination when they’re a part of their next transaction.”

PennyMac, by contrast, has been more exposed to the mortgage industry’s weak spots: thinner margins in government‑backed lending, a smaller direct‑to‑consumer footprint, and heavier reliance on a market for mortgage servicing rights that has been volatile since rates began rising following the pandemic. As mortgage loan application volumes dried up after the pandemic and the easy refinance era ended, lenders like PennyMac have struggled to replace that business with profitable new originations.

“People are suddenly willing to not only refinance their mortgage, but they are willing to move because they are no longer feeling like they are locked in,” Krishna said. “It’s the turnover that we eventually expected to see.”