Luxury Home Prices Surge Amid Limited Inventory
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 03 2026
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Should l Buy RKT?
Source: Newsfilter
- Luxury Price Surge: According to Redfin, the median sale price of luxury homes rose 4.6% year-over-year in December 2025 to $1.31 million, significantly outpacing the 1.4% increase in non-luxury prices, indicating robust performance in the high-end market.
- Slow Growth in Listings: Active listings of luxury homes increased by only 5.6% year-over-year, marking the slowest growth since April, reflecting a scarcity of quality inventory that is driving prices up and intensifying buyer competition.
- Decline in Pending Sales: Pending sales of luxury homes fell by 1.1% year-over-year, the largest drop in six months, while non-luxury pending sales decreased by 0.6%, highlighting a softening demand in the market.
- Extended Sales Cycle: In December 2025, the typical luxury home took 64 days to sell, five days longer than the previous year, suggesting that while demand for luxury homes remains strong, the pace of transactions has slowed.
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Analyst Views on RKT
Wall Street analysts forecast RKT stock price to rise
11 Analyst Rating
5 Buy
6 Hold
0 Sell
Moderate Buy
Current: 17.710
Low
18.00
Averages
22.18
High
25.00
Current: 17.710
Low
18.00
Averages
22.18
High
25.00
About RKT
Rocket Companies, Inc. is a fintech platform including mortgage, real estate and personal finance businesses: Rocket Mortgage, Redfin, Mr. Cooper, Rocket Homes, Rocket Close, Rocket Money, and Rocket Loans. The Company's full suite of products empowers its clients across financial wellness, personal loans, home search, mortgage finance, title and closing. Through these businesses, it delivers client solutions leveraging its Rocket platform. It operates in two segments: Direct to Consumer and Partner Network. In the Direct to Consumer segment, clients have the ability to interact with Rocket Mortgage digitally and/or with the Company's mortgage bankers. It provides client service and leverages its brand to strengthen its wholesale relationships, through Rocket Pro, as well as enterprise partnerships, both driving growth in its Partner Network segment. The Company's capabilities span the entirety of homeownership, such as home search, financing, title, closing and servicing.
About the author

Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Revenue Expectations: Wall Street analysts project Rocket Companies' fourth-quarter revenue to reach $2.30 billion, representing a substantial 93% year-over-year increase, highlighting the company's significant growth potential in the AI-driven mortgage market.
- AI Innovations Driving Growth: The AI-powered Pipeline Manager Agent and Purchase Agreement AI Agent launched by Rocket Mortgage enable loan officers to prioritize leads and automate complex purchase agreement reviews, reducing processing time by 80% and projected to save over 150,000 team member hours annually.
- Retail Sentiment Shift: Despite Rocket Companies' stock jumping nearly 36% over the past 12 months, retail investor sentiment has shifted from 'neutral' to 'bearish', reflecting a divergence in market outlook on future performance.
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- First-Time Buyer Age Shift: According to a new report from Redfin, the median age of first-time homebuyers decreased from 36 in 2024 to 35 in 2025, indicating slight improvements in affordability and inventory that allow younger buyers to enter the market more easily.
- Repeat Buyer Trends: The median age of repeat buyers dropped to 47, down from a historic peak of 52 in 2024, reflecting the release of pent-up demand as buyers adjusted to high mortgage rates and decided to move in 2025.
- Support for Young Buyers: A survey revealed that 19.6% of millennials and 14.8% of Gen Z homebuyers received cash gifts from family to assist with down payments, highlighting the significant role of family support in enabling young people to purchase homes.
- Market Dynamics Analysis: Despite ongoing price increases, the average 30-year fixed mortgage rate fell to 6.6% in 2025 from 6.72% in 2024, suggesting that affordability may improve further, encouraging greater participation from younger homebuyers in the housing market.
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- Mortgage Rate Decline: The average 30-year fixed mortgage rate has dropped to 6.09%, the lowest since September 2022, approximately 80 basis points lower than last year, significantly enhancing home affordability for buyers.
- Lower Housing Costs: For a $400,000 home, the monthly payment at the current rate is $1,937, down from $2,103 at last year's 6.88%, saving buyers $166 monthly and nearly $59,760 in interest over 30 years, which could stimulate housing demand.
- Surge in Refinancing Activity: The decline in rates is expected to boost refinancing, particularly for homeowners who purchased in the last three years, potentially lowering their monthly payments and driving business growth for mortgage companies like Rocket Companies and Wells Fargo.
- Home Improvement Retailers Benefit: Lower rates may encourage homeowners to tap into their home equity for large purchases, benefiting home improvement retailers like Home Depot and material suppliers like Trex, thereby enhancing their market performance.
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- Mortgage Application Stability: According to the Mortgage Bankers Association's seasonally adjusted index, total mortgage application volume was essentially flat last week, rising just 0.4% compared to the previous week, indicating that homebuyer demand has not significantly improved.
- Impact of Rate Decline: The average contract interest rate for 30-year fixed-rate mortgages decreased from 6.17% to 6.09%, marking the lowest level since September 2022; however, mortgage purchase applications still fell by 5% despite improved affordability.
- Surge in Refinancing Demand: Refinance applications increased by 4% from the previous week and were 150% higher year-over-year, reflecting a significant rise in borrower interest in refinancing as rates drop, although the year-ago comparison is based on a low base.
- Increased Market Uncertainty: A report from Redfin indicated that nearly 40,000 home-sale agreements were canceled in January, representing 13.7% of homes under contract, the highest January share since 2017, highlighting the impact of economic uncertainty on consumer behavior.
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- Cancellation Rate Surge: According to Redfin's report, nearly 40,000 home-sale agreements were canceled nationwide in January, representing 13.7% of homes that went under contract, an increase from 13.1% a year earlier, highlighting the strong impact of a buyer's market.
- San Antonio Leads: Among 47 major U.S. metros, San Antonio recorded the highest home purchase cancellation rate at 21.2%, reflecting a market where sellers outnumber buyers two to one, giving buyers greater negotiating power and options.
- Economic Uncertainty Impact: Many buyers are backing out of deals due to concerns about the economic outlook, particularly first-time buyers who are using most of their savings for down payments and facing risks from layoffs, tariffs, and geopolitical tensions.
- Market Disparities: In stark contrast to San Antonio's high cancellation rate, San Francisco's rate was only 3.5%, illustrating the significant supply-demand differences across markets, with the prevalence of buyer's markets leading to higher cancellation rates.
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