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Mortgage rates are at rock bottom, housing demand is sky high and millions of Americans are rethinking where to live as businesses embrace remote work. What better time for to go public?

This five-year-old online mortgage startup has enjoyed tremendous growth in recent years thanks to these trends, plus its canny ability to streamline the famously laborious and expensive home buying process. has pushed fees and commissions down to zero, which has helped it do billions of dollars in mortgage originations, refinancings and title and property insurance sales.

Yet uncertainty remains about’s business. Bigger players in the mortgage space like Rocket Mortgage have bumbled along despite impressive technology and intense home buying interest—and’s founders come with their own baggage, including a recent controversy when’s chief executive fired 9% of his workforce via Zoom.

The only question then is whether you should see as a hidden gem, or more of a fixer-upper?

The Case For’s IPO

As with any hot new company, there’s an impressive growth story with that investors hope they can build upon.

In May 2021, the Softbanked-backed disclosed that it had entered a deal to go public via a merger with special purpose acquisition company (SPAC) Aurora Acquisition. The companies are aiming to close the deal sometime before the end of the year. reported that its loan value had climbed to more than $24 billion in 2020, an increase of 490% year over year, while its title insurance business had grown by 855% year over year in 2020, its homeowners insurance was up 300% and real estate transactions were up 471%.

This impressive growth, according to the company, was a product of a labor force that costs about half that of its competitors, and that it completes more than twice as many loans per month than competitors. also has the backing of major financial institutions, like SoftBank and Ally.

Clearly,’s plan to incentivize more regular folks to take out a mortgage online is working well. Getting a mortgage is famously difficult, replete with a seemingly never-ending array of fees.’s website, on the other hand, is easy to use, its brokers don’t charge commissions or loan origination fees, and prospective buyers can get pre-approved in a matter of minutes.

This kind of home buying experience is sure to connect with younger, digital native Americans between the ages of 22 and 40. This is the biggest of cohort of home buyers, making up 37% of the market, according to the National Association of Realtors.

As noted above, times couldn’t be stronger for mortgage companies. In October 2016, the interest on a 30-year fixed rate mortgage was 3.47%, according to Freddie Mac. That had dropped to 2.74% by the beginning of 2021. It’s now around 3.07%.

This has led to an avalanche of mortgage refinancing, as existing owners looked to take advantage of lower rates. It’s also piqued the interest of potential buyers looking to borrow less to buy homes. Median home sale prices are currently around $410,000, according to the Department of Housing and Urban Development, up nearly $100,000 from five years ago.

The Case Against the IPO

As anyone who lived through the housing market meltdown of 2005 to 2007 can attest, real estate ain’t always so rosy.

While has been able to make its bones in a low-rate environment, what happens when mortgage prices return to historical norms? How will that impact its refi business, for instance?

And even before then, the current housing market has issues. A shortage of construction workers combined with supply chain woes have delayed new home construction. That’s driven up demand for existing housing, but there are only so many of that to go around. At some point, housing prices may become too burdensome for families to bear, no matter how low mortgage rates are, which may crush demand.

Then there’s the curious case of Rocket Mortgage (RKT). This Detroit-based online mortgage company is the nation’s leading originator by volume, and Rocket is well known as a digital disruptor. After the company’s initial public offering (IPO) in 2020, insatiable demand for its shares never appeared. RKT is down more than 13% in 2021 to date, compared to a 25% gain in the S&P 500.

Even still, analysts appear bullish on Rocket’s long-term advantages.

“While Rocket’s revenue and earnings will likely remain volatile, a symptom of the cyclical nature of the mortgage industry, the company’s strong competitive position and trends in consumer behavior will provide it with long-term secular growth,” noted Morningstar equity analyst Michael Miller.

Should You Invest in

The mortgage industry is incredibly competitive, which means is facing many entrenched stalwarts with their own powerful technologies to increase efficiency and reduce costs. Meanwhile, it doesn’t have the lead-generating capabilities of a Wells Fargo or JPMorgan Chase, who can convince millions of existing customers to get a mortgage through them.

What has is a powerful growth story and a vision of an easier mortgage application process for the future. Its executives also bring controversy that could upend that narrative. In 2020, Forbes detailed how Better’s chief executive Vishal Garg created a reportedly unhealthy work environment and drew lawsuits from former business partners, some of which allege fraud. The more recent brouhaha over Garg’s mass layoffs adds further fuel to the narrative that simply isn’t governed effective.

Given Rocket Mortgage’s dismal performance, the uncertainty in the housing market and the inherently risky proposition of buying shares of any individual company, you should consider waiting until the dust settles before diving into shares of

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