Mortgage finance companies sit between people who want to buy homes and the money that pays for them. Some lend it, some collect the payments afterwards, some insure the lender in case the borrower stops paying, and some simply own the debt and live off the interest. All of them depend on the same thing, which is what it costs to borrow.
Right now it costs a lot. The average 30-year mortgage has climbed back above 7%, its highest in three years, and the industry’s own forecasters expect it to stay above that level through next year.
Fewer people borrow when money is expensive, so the Mortgage Bankers Association now expects lending to shrink next year rather than recover. It had been forecasting the opposite only twelve months ago.
The damage is not spread evenly. People still move house, get married and have children whatever the Federal Reserve does, so home buying carries on at roughly the same pace. Refinancing is where it hurts. Few people swap a 4% mortgage for a 7% one, so that business keeps shrinking.
What makes this moment unusual is the direction of travel. For two years, the industry waited for rates to fall and bring borrowers back. The expectation now runs the other way, with the same forecasters expecting the Federal Reserve to raise rates further rather than cut them. Higher for longer has stopped being the risk and started being the plan.
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Size has become the obvious defence. Rocket Companies bought Mr. Cooper for $14.2 billion last October and now collects the monthly payments of close to 10 million homeowners, more than anyone else in the country. That matters because those fees arrive whether or not anybody is taking out a new loan. When new business dries up, the company with the biggest back book suffers least.
The sector also holds very different businesses wearing the same label, which is part of why it keeps turning up in the same screens as the 10 Best Fundamental Stocks to Invest in According to Billionaires. We published that list in April, and the stock we ranked first has returned 13.5% since. A lender earns a fee each time it writes a loan, so it feels a slowdown straight away. A mortgage insurer is paid premiums on loans already written, and it quietly benefits when borrowers stay put, because a mortgage nobody refinances keeps paying. A mortgage trust owns the debt itself and cares about something else again, which is the gap between what it pays to borrow and what it earns on what it holds.
So the same rate forecast can be bad news for one of these companies and good news for another. That is why the sector is worth reading company by company rather than as one bet.
Given this backdrop, we will take a look at the best mortgage finance stocks to buy according to billionaires.
Our Methodology:
To list the 10 Best Mortgage Finance Stocks To Buy According to Billionaires, we used stock screeners to identify companies operating in the mortgage finance sector, covering mortgage originators and servicers, mortgage insurers, and mortgage REITs. From this pool, we shortlisted the stocks held by the highest number of billionaires in the Insider Monkey database, as of the end of Q2 2026. Finally, the stocks are arranged in ascending order of the number of billionaires holding them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. Essent Group Ltd. (NYSE:ESNT)
Number of Billionaire Holders: 13
Market Cap: $5.92 Billion
Read more: 15 Best Mortgage Insurance Companies Heading into 2024
