3 Cracks in the Housing Market Rocket Must Overcome on Oct. 29
Rocket Companies reports earnings October 29 with shares down nearly 40% and estimates slashed 28% in three months. Three structural cracks in housing could decide whether its market share gains survive a market that keeps shrinking.
Rocket Companies (NYSE:RKT | RKT Price Prediction) reports third-quarter results on October 29, 2026. Shares are down 39.41% year to date. I’ll be watching whether Rocket’s scale can hold up against three widening gaps in housing.
Record Share Gains Meet a Shrinking Market
Last quarter, adjusted EPS of $0.16 missed the $0.1644 consensus, and revenue of $2.784 billion came in below expectations of $2.831 billion. That ended a 4-quarter EPS beat run. Management still called it the most profitable quarter in four years, with record purchase share of 6.2% and refinance share of 14.3%.
Since then, the environment has declined. CFO Brian Brown expected the third-quarter mortgage market to be smaller than the second, “something the industry has not seen since 2022.” Rocket guided to Q3 adjusted revenue of $2.5 billion to $2.7 billion. Existing home sales ran at a 3.99 million annualized pace in September, while housing starts fell 5.2%. The stock rose 8.81% last week but remains down 33.39% over the past year.
Wall Street Has Already Cut Its Numbers
| Metric | Consensus | Prior Year | Implied Growth |
|---|---|---|---|
| Q3 2026 Normalized EPS | $0.1367 | $0.07 | 95.3% |
| Q3 2026 Revenue | $2.601 billion | $1.605 billion | 62.0% |
| FY 2026 EPS | $0.5833 | N/A | N/A |
| FY 2026 Revenue | $10.766 billion | $6.695 billion | 60.8% |
The Q3 EPS consensus has dropped about 28% from $0.19 three months ago.
Three Cracks That Will Define This Quarter
1. Rates and affordability. Thirty-year fixed rates sit near 7.40%, and pending home sales are near historic lows. Rate-and-term refinance makes up about 30% of revenue and has the most rate exposure. Consider whether the 70% of revenue management calls recurring or less rate-sensitive really cushions the hit.
2. Gain-on-sale pressure. Rocket Pro’s gain on sale margin contracted to 0.69% on Compass partnership investments. JPMorgan and Morgan Stanley cut price targets on concerns of gain-on-sale compression. Brown said in August that margins were “holding steady and even some improvements at the channel level.” This report will show whether that claim held through the summer.
3. MSR swings and integration costs. Rocket booked a $616M negative MSR fair value change last quarter. Q3 expenses include about $100 million of one-time acquisition costs and $110 million of intangible amortization. Excluding those items, management expects expenses to fall about $100 million quarter over quarter. That is the number I’ll be checking first.
Cost Discipline Has to Carry a Weak Market
Rocket has $11.2 billion of liquidity and remains on track for $400 million in Mr. Cooper synergies by year end. That gives management room to keep investing. After last quarter’s miss and steep estimate cuts, this report needs to show that market share gains and AI-driven savings can protect earnings while the housing recovery stalls. If expenses fall as promised, the case for Rocket as the industry consolidator gets stronger.
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