What happened

Shares of Rocket Companies (NYSE:RKT) surged 11.2% on Monday after interest rates retreated from their recent highs.

So what

After surging above 1.6% last week, the yield on the 10-year Treasury note fell back near 1.4% on Monday. The 10-year note is an important benchmark that tends to impact mortgage rates. 

Miniatures homes are on top of rising stacks of gold coins.

The prospect of lower mortgage rates bodes well for Rocket Companies and its shareholders. Image source: Getty Images.

As a leading mortgage originator, Rocket Companies is highly exposed to interest rate fluctuations. When rates rise suddenly, mortgage refinancings tend to decline, as homeowners wait (and hope) for rates to fall again.

A dramatic decline in refinancings would weigh heavily on Rocket's earnings. With this risk moderating on Monday, investors bid up Rocket's shares.

Now what 

Rocket Companies is fresh off a blockbuster fourth quarter that saw its revenue and adjusted profits soar 144% and 350%, respectively. The mortgage titan made so much money that it declared a $1.11 special dividend. For a stock that closed at $24.30 on Monday, that's quite a lucrative cash payout for investors. 

Better still, if interest rates (and, by extension, mortgage rates) stay low, more good times could lie ahead for Rocket Companies and its shareowners.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.