The Zacks Mortgage & Related Services industry is grappling with persistent challenges as mortgage rates remain elevated, hitting nearly 7% recently—a rise from the low-6% range at the beginning of the year. Following the Federal Reserve’s 25-basis-point rate hike on September 20, 2023, the outlook for home purchase applications and refinancing activities remains bleak. Analysts note that the industry’s earnings estimates for 2026 have been revised 44.4% lower over the past year, reflecting declining confidence in earnings growth potential.
Despite the adverse conditions, certain companies are positioned for potential growth. Rocket Companies (RKT) operates a $2 trillion servicing portfolio and anticipates a 121.4% year-over-year increase in earnings for 2026. Federal Agricultural Mortgage (AGM) reported a record business volume of $37.2 billion by Q2 2026, marking a 22% increase year-over-year, and expects a 24.4% rise in earnings. LendingTree (TREE) also forecasts a 52.9% increase for 2026.
Overall, the Zacks Mortgage & Related Services sector is ranked #239, putting it in the bottom 3% of Zacks industries, with a year-over-year performance decline of 46.9%. The sector currently trades at a price-to-book ratio of 1.63, significantly lower than the S&P 500’s 7.09.
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