Rocket companies (RKT) shares fell 10% on Wednesday, a day after the online financial platform missed revenue estimates by a wide margin and gave muted guidance as the housing market continued to be squeezed by high borrowing costs.

The mortgage provider’s revenue plunged 46% year over year to $647 million, about half of what analysts surveyed by Visible Alpha expected. Adjusted earnings per share (EPS) of $0.08 was in line with forecasts.

The decline in revenue occurred despite Rocket’s net rate lock volume jumping 43% to $29.8 billion. Profit on commercial margin increased 2 basis points (bps) at 2.78%. However, this figure is down from 2.99% in the second quarter.

CEO calls housing market ‘difficult’

“Over the past few months, the market has shaken up our industry in almost every way imaginable,” Chief Executive Officer (CEO) Varun Krishna said during the company’s earnings call, according to a transcript provided by AlphaSense. “As inflation slowed, the Fed cut rates for the first time in four years. But interestingly, while the Fed lowered rates, mortgage rates did not follow suit.”

Krishna described the real estate market as “tough”.

Chief financial officer (CFO) Brian Brown added: “We expect the mortgage market in the fourth quarter to be smaller than in the third quarter. »

The company expects revenue for the current quarter to be between $1.05 billion and $1.20 billion. Visible Alpha’s estimate was $1.18 billion.

The news sent Rocket Companies shares into negative territory for the year.