Rocket Companies Inc. (RKT) shares climbed sharply in Thursday's after-hours session after President Donald Trump outlined an ambitious plan to lower mortgage rates across the country. Posted on Truth Social, the announcement detailed how the administration intends to deploy a massive war chest to reshape the housing market.

The $200 Billion Mortgage Play

Trump's logic goes like this: Because his administration held off on selling Fannie Mae and Freddie Mac, those government-sponsored enterprises are now sitting on roughly $200 billion in cash. Rather than letting it gather dust, Trump says he's directing his team to deploy that capital into mortgage bond purchases.

The goal? Push mortgage rates lower, reduce monthly payments, and "make the cost of owning a home more affordable." It's part of a broader effort to address housing affordability, a challenge that's been squeezing American families as rates climbed over the past few years.

Why Rocket Stock Is Responding

Here's where things get interesting for Rocket Companies. The company's entire business model hinges on mortgage volume. When rates drop, homeowners start refinancing in droves, and more potential buyers suddenly qualify for loans they couldn't afford before. That translates directly into higher application volumes and loan originations flowing through Rocket's largely fixed-cost, technology-powered platform.

A $200 billion buyer entering the agency mortgage bond market would likely compress mortgage-bond yields, which in turn pushes actual mortgage rates lower. Even the possibility of such a program signals a potential rebound in loan demand and fee income for Rocket after enduring a tough stretch of rate-driven weakness. Traders are clearly betting on improved earnings power down the line, bidding up the stock in anticipation.

The company currently holds a Momentum score of 94.04 in market rankings, reflecting its strong recent price performance and suggesting investors are already pricing in better days ahead for the mortgage giant.