What happened

Shares of Rocket Companies (RKT 5.69%) jumped more than 13% last month, according to data provided by S&P Global Market Intelligence. The parent company of Rocket Mortgage and Quicken Loans is enjoying surging demand for its services with mortgage rates near record lows. 

So what

Rocket's third-quarter loan origination volume soared 122% year over year to $89 billion. That drove a 186% increase in its total revenue, to $4.6 billion. "In the midst of the pandemic, we were able to help an unprecedented number of Americans buy and refinance homes," CEO Jay Farner said in a press release. 

Miniature houses are on top of rising stacks of gold coins.

Rocket Companies' mortgage businesses are booming. Image source: Getty Images.

Better still, Rocket is becoming more profitable as it expands its revenue base. Its gain on sale margin -- essentially, the difference between the retail and wholesale cost of a mortgage -- improved by 37% to 4.52%. Rocket's net income, in turn, skyrocketed by a staggering 506% to $3 billion. 

"Rocket Companies assisted more clients in the third quarter of 2020 than any quarter in our 35-year history," Farner said. "More importantly, the company did this while maintaining industry-leading margins and profitability, demonstrating the sheer power of our platform as Rocket executes at incredible scale." 

Now what 

As the country's largest mortgage originator, Rocket Companies is well positioned to profit from the Federal Reserve's plans to keep interest rates low until 2023. 

Still, the mortgage market is cyclical, and refinancings will no doubt decline at some point. With mortgage rates unlikely to fall much further, eventually, everyone who wanted to refinance will have had the opportunity to do so. But that's likely a ways away. In November, financial data provider Black Knight reported that 19.4 million people could save an average of $309 per month by refinancing.