What Does the Housing Recession Mean for Rithm Capital?
Rising interest rates have caused what some are calling a housing market recession. Mortgage origination has collapsed from 2021's rates, and housing starts and home sales are well below last year's levels. How does this affect Rithm Capital (NYSE: RITM)?
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Rithm Capital is the new name for New Residential, which went through a reorganization recently. The company is a real estate investment trust (REIT) that invests in mortgages as well as a mortgage originator. It is also a major servicer of mortgage loans. In 2021, mortgage origination volume hit $4.4 trillion as originators feasted on easy refinance volume, which was powered by the Federal Reserve cutting rates to about zero while buying oodles of mortgage-backed securities to support the economy in the aftermath of COVID. This is now all reversing. The Mortgage Bankers Association forecasts origination volume falling to $2.4 trillion this year as refinance activity evaporates as rates rise.
Source Fool.com
