UWMC - UWM Holdings fall ahead of Q1 results as rising mortgage rates weigh on demand

UWM Holdings (NYSE:UWMC) stock is dropping 5.8% in Monday afternoon trading ahead of the mortgage originator's Q1 earnings release Tuesday before the market opens. The results will show just how much the combination of climbing house prices and higher mortgage rates is slowing demand for mortgages. As the Federal Reserve embarked on a policy tightening cycle to rein in inflation, mortgage rates have risen. Last week, the 30-year fixed-rate mortgage averaged 5.27%, the highest since 2009. During Q1 mortgage rates, the average 30-year FRM rate jumped to ~4.8% from 3.1%. When the company reported Q4 results in March, it expected Q1 production to be $33B-$42B, down from the $55.2B it originated in Q4 2021. It expected its gain margin to be between 75 and 85 basis points, relatively stable to Q4's 80 bp gain margin. The consensus estimate for UWMC's Q1 EPS is $0.15; in the past month the consensus has been revised

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UWM Holdings fall ahead of Q1 results as rising mortgage rates weigh on demand