The questions to ask of the Quicken Loans IPO

Quicken Loans is experiencing growth due to the extraordinarily low-interest rate environment that Covid-19 has brought on the US financial markets. The 10-year Treasury yield has fallen from 1.6% to 0.6% since February, resulting in 30-year, fixed-rate mortgages under 3%.  In this environment, Quicken Loans is expected to prosper mightily.  The company originated $52bn in mortgages in 1Q20, double last year’s first quarter performance, and it is anticipated to do even better in 2Q20. These historically low interest rates may eventually rise, but Quicken Loans has proven its ability to grow throughout its history, posting loan volume growth at a 20% CAGR over the past decade. FT

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