With the Fed hinting at interest rate cuts, generationally high mortgage rates are starting to ease — and Americans are jumping on the opportunity to buy their dream home. As mortgage rates hit a 16-month low, mortgage applications have risen to a 19-month high, showing that rate-related woes are no longer holding back homebuyers. And hoping to ride that wave, investors are bidding up mortgage lenders.

• America’s largest mortgage lender, Rocket CompaniesRKT
  , has seen its stock surge over 27% in the past month — even though its net income has dropped to near-zero.
• LoanDepotLDI
  has had an even more dramatic comeback, with its stock up 41% over the same period.

Timing the cut: With the Fed widely expected to lower rates in September, many Americans are buying homes now to avoid the price hikes that might follow. Median home prices have fallen from an all-time high of $442.6K in Q4 2020 to $412.3K in Q2 2024 — a trend that could reverse as borrowing costs slowly become more affordable again.