4 Mortgage Stocks Primed to Surge as the Market Rebounds

The mortgage market is quietly heating up-and savvy investors are starting to take notice. After a bruising slowdown, early 2025 is flashing signs of a turnaround: U.S. mortgage originations are expected to climb to $2.3 trillion this year, up nearly 30% as rates stabilize and homebuyers re-enter the market. In Canada, a massive wave of mortgage renewals is creating a once-in-a-decade window for disruption.

From AI-powered lending platforms to aggressive market consolidation, a new generation of mortgage players is rewriting the rules-and positioning themselves to dominate as the cycle turns.

Let's take a closer look at some of the companies shaping this rapidly evolving landscape.

Pineapple Financial Inc. (NYSE American: PAPL) is a Toronto-based mortgage brokerage network and technology platform that went public in late 2023. While still in its early stages as a publicly traded company, Pineapple has demonstrated solid revenue growth and improving operational efficiency through the first half of fiscal 2025.

For the six months ended February 28, 2025, Pineapple reported $1.51 million in revenue, an 11.8% increase year-over-year. Gross billings rose 15.2% to $9.33 million, reflecting higher transactional volume and agent productivity across its brokerage network. Despite a net loss of $1.25 million for the period, this marks a 17.9% improvement over the $1.53 million loss posted in the same period the prior year.

Quarter-over-quarter performance also showed continued progress. In Q2 FY2025, Pineapple generated $749,000 in revenue (up 6.8% YoY) and $4.52 million in gross billings (up 19.6%). The company reduced its net loss to $595,449 from $657,151 in Q2 FY2024, while lowering salaries and benefits expenses by 27.7% and advertising/marketing spend by over 60%. Management attributed these improvements to operational streamlining and its transition to a more scalable, tech-enabled platform.

These results build on a strong Q1, when Pineapple posted 34.6% YoY revenue growth and a 26.8% reduction in net loss. The company ended Q1 with $619,581 in cash and shareholders' equity of $1.15 million, signaling modest but stable capitalization for its stage of growth.

Looking forward, PAPL appears positioned to benefit from Canada's large pipeline of mortgage renewals, which management sees as a near-term tailwind. CEO Shubha Dasgupta has emphasized a focus on cost discipline and digital infrastructure as the company aims to scale efficiently. CFO Sarfraz Habib highlighted the narrowing losses and improved operating cash flow as markers of progress toward profitability.

PAPL is showing signs of maturing into a leaner, more efficient player within the Canadian mortgage origination space. Its financial trajectory and positioning in a tech-forward segment make it a company to watch as broader sector dynamics evolve.

Rocket Companies (NYSE: RKT) is a Detroit-based fintech platform known for modernizing the homeownership journey. Best known through brands like Rocket Mortgage and Rocket Homes, the company also offers services in real estate, title, and personal finance through products like Rocket Money and Rocket Loans. Founded in 1985, Rocket has become a leader in both mortgage origination and servicing-earning the #1 spot in J.D. Power's customer satisfaction rankings a combined 22 times.

Now, Rocket is taking bold steps to expand its reach and integrate the entire homeownership process under one roof.

In March 2025, Rocket announced it would acquire Redfin, one of the most visited real estate websites in the U.S., in a $1.75 billion all-stock deal. With nearly 50 million monthly visitors, Redfin brings serious online traffic, as well as over 2,200 real estate agents in 42 states. This move will connect Rocket's mortgage tools directly to house hunters, aiming to simplify the search-to-closing process.

"This deal accelerates our strategy to match buyers with the best agents and loan officers, all in one place," said Rocket CEO Varun Krishna.

Rocket expects the merger to deliver over $200 million in synergies by 2027, including $140 million in cost savings and $60 million in new revenue from cross-selling. The company believes this will strengthen its ability to offer a seamless, AI-powered buying experience backed by its expanding database of over 100 million properties.

Just weeks later, Rocket announced another huge deal: the acquisition of Mr. Cooper Group, America's largest mortgage servicer, in a $9.4 billion all-stock transaction. Together, the combined company will manage a servicing portfolio of $2.1 trillion-representing 1 in 6 U.S. mortgages.

This deal supercharges Rocket's servicing arm while expanding its ability to keep clients long-term. With an 83% recapture rate (how often Rocket keeps customers coming back), the company already outpaces the industry average by 3x. Now, with access to Mr. Cooper's nearly 7 million clients and 150 million annual interactions, Rocket expects to grow faster and smarter.

The transaction is expected to generate $500 million in annual revenue and cost synergies, improve automation, and be immediately accretive to earnings. Mr. Cooper's CEO Jay Bray will join as President and CEO of Rocket Mortgage once the deal closes.

With back-to-back acquisitions and a massive data advantage, Rocket is positioning itself as the most integrated and personalized homeownership platform in the market. Its AI tools are designed to anticipate customer needs, reduce friction in the homebuying process, and deepen long-term relationships with clients.

Investors should keep an eye on Rocket's upcoming Q1 2025 earnings report on May 8, especially in light of these strategic moves. Between Redfin's online traffic and Mr. Cooper's massive servicing book, Rocket's flywheel for growth is spinning faster than ever.

UWM Holdings Corporation (NYSE: UWMC) is a Michigan-based wholesale mortgage lender and parent company of United Wholesale Mortgage, the largest lender in the U.S. by volume. The company operates exclusively through the wholesale channel, partnering with independent mortgage brokers across the country. While macro headwinds continue to pressure mortgage origination volumes industry-wide, UWM has maintained its leadership position by aggressively pricing and investing in technology to streamline the broker experience.

For Q4 2024, UWM originated $38.7 billion in loans, up 58.6% from $24.4 billion in Q4 2023, though slightly below Q3 2024's $39.5 billion. Net income for the quarter came in at $40.6 million, compared to a net loss of $461 million in the year-ago quarter. Gain-on-sale margin was 105 basis points, a modest decline from 118 bps in Q3 but an improvement from 92 bps in Q4 2023. Adjusted EBITDA totaled $118.2 million for the quarter, reflecting stable operating profitability despite fluctuating loan volumes.

Full-year 2024 originations reached $139.4 billion, a 28.7% increase from 2023, including $96.1 billion in purchase loans and $43.4 billion in refinances. Net income for the year was $329.4 million, compared to a $69.8 million net loss in 2023. The company ended the year with $507.3 million in cash and equivalents, and a $3.97 billion mortgage servicing rights (MSR) portfolio with a weighted average coupon of 4.76%.

Operationally, UWM continues to enhance its broker tools and efficiency. Recent product rollouts include a 90% LTV cash-out refinance option and expanded use of its AI-based ChatUWM platform, which now assists with automated income calculations and product recommendations. Application-to-close time averaged 17 business days during the quarter, and customer satisfaction (NPS) remained strong at 82.5.

Looking ahead, UWM guided for Q1 2025 loan production between $28 billion and $35 billion, with a projected gain margin of 90 to 115 bps. The company also announced that Rami Hasani, formerly of Deloitte and currently VP of Finance, will assume the role of CFO starting April 1, 2025. Outgoing CFO Andrew Hubacker will stay on in an advisory capacity.

While UWM's focus on scale and aggressive pricing may continue to pressure margins in the near term, the company's dominance in the wholesale channel, stable liquidity, and disciplined cost structure provide a degree of resilience as the broader housing market remains in flux.

PennyMac Financial Services, Inc. (NYSE: PFSI) is a prominent U.S.-based specialty financial services firm focusing on mortgage production, servicing, and related investment management. Founded in 2008, PennyMac has grown to be a leader in the residential mortgage industry, employing approximately 4,100 people. In 2024, the company originated $116 billion in new loans and serviced a portfolio of $666 billion in unpaid principal balance (UPB), solidifying its position as a top mortgage lender and servicer in the U.S.

In February 2025, PennyMac launched NonDel+, a new Non-Delegated solution within its POWER+ portal. This platform offers an intuitive, end-to-end loan experience tailored for banker partners who need control over their loans but seek assistance with disclosures, loan documents, and additional services. The initiative reflects PennyMac's ongoing commitment to expand its Third-Party Origination (TPO) offerings and enhance its competitive standing in the wholesale mortgage market. With the introduction of NonDel+, PennyMac further solidifies its leadership in the TPO channel, which is critical as the company remains the third-largest wholesale lender and the top acquirer of loans in the correspondent channel.

In March 2025, PennyMac entered a strategic partnership with the LA28 Olympic and Paralympic Games and Team USA, becoming the official mortgage supporter for the 2026 and 2028 U.S. Olympic and Paralympic Teams. This partnership underscores PennyMac's commitment to the values of excellence and community engagement. The company will work with athletes and hopefuls to provide mortgage education and support, fostering a connection between the pursuit of athletic achievement and homeownership goals. This collaboration will also be central to PennyMac's marketing efforts, including the "Where Greatness Lives" campaign.

For the first quarter of 2025, PennyMac reported net income of $76.3 million, or $1.42 per share, on revenues of $430.9 million. This performance reflects a solid quarter despite broader market challenges. The company's production segment generated a pretax income of $61.9 million, driven by strong loan acquisition and origination activity, including $28.9 billion in total loans originated or acquired, representing a 33% increase from the previous year. The servicing segment continued its growth trajectory, with a pretax income of $76.0 million, reflecting a 10% year-over-year increase in the servicing portfolio, which reached $680.2 billion in UPB.

PennyMac's results were partially impacted by valuation-related changes, with a $205.5 million loss in Mortgage Servicing Rights (MSR) fair values, offset by $106.8 million in hedging gains. However, the company's robust management of its portfolio and capital structure positioned it well for future growth, as indicated by the increase in book value per share to $75.57 from $74.54 at the end of 2024.

Looking ahead, PennyMac's focus remains on leveraging its balanced business model to navigate market volatility, emphasizing continued growth in its servicing portfolio and strategic management of mortgage production. CEO David Spector highlighted the company's strength in adapting to economic changes, with plans to integrate artificial intelligence to enhance operational efficiencies. PennyMac remains committed to maximizing shareholder value and maintaining its leadership position in the mortgage industry.

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