(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — The housing market has been in a depression ever since the Federal Reserve embarked upon one of its most aggressive hiking cycles ever, beginning at the end of 2021. So long as short-term rates have been held high, it’s been a significant impediment for investments in the space. It’s not that home prices have been problematic. The issue is that millions of Americans have locked in mortgages at rates so low that moving makes no sense. This has constrained turnover and turnover is what makes the world go ’round for the mortgage business. Without refi activity and existing home sales, it’s like an ice age for realtors, mortgage brokers and home improvement. The stock market is starting to figure out that we are leaving the ice age behind and headed into a new era with lower mortgage rates and a comeback for housing-related activity. We’re going to show you two names that have recently joined the Best Stocks in the Market list. One of them is Home Depot (HD) , which has been rallying on the back of a good earnings report and improving guidance. When rates come down and homes begin to turn over, HD should see increased foot traffic in its stores and more action within its ecommerce unit as projects people were holding off on resume. The other name is Rocket Companies (RKT) , perhaps one of the best pure-plays on increased housing activity as it is both a massive mortgage loan originator as well as the owner of Redfin, one of the leading real estate portals on the internet. Full disclosure, I am currently long shares of RKT personally. I’m not alone in believing that a turnaround at Rocket is at hand. ValueAct Capital, a highly successful activist firm, reported a position of over 25 million shares of the company, representing 9.9% of the company’s pro forma share count, per Verity data. (Rocket is in the midst of an acquisition of a giant mortgage servicing company called Mr. Cooper which will affect the final share count upon closing). Sean’s going to fill you in on HD and RKT below and then I’ll be back with some charts. Best Stock Spotlight: Rocket Cos., Inc. (RKT) On the list since: 9/8/2025 One-year price chart with moving averages, RSI: Sean — RKT is rocketing higher on hopes of a thawing housing market. Over the past couple of years, the housing market has been stuck in a deep freeze. Higher mortgage rates have kept both buyers and sellers on the sidelines, creating one of the slowest transaction environments in recent history. Existing homeowners have been reluctant to give up low-rate mortgages, while affordability has completely priced a majority of buyers out of the market. The result has been a significant slowdown in home sales volumes, weighing on companies tied directly to housing activity, like Rocket (RKT), which thrives when mortgage demand is healthy. You can see on the chart below, this stock was 85% below ATHs during the beginning of this housing market slowdown: The stock has bounced considerably, all while rates are still the highest they have been in decades for U.S. home buyers. Stocks bottom before earnings do, and the flip side is also true. Stocks bounce before earnings jump. The market is telling us the housing market is primed for some action, and RKT is in pole position for when the housing market wakes up. Rocket Companies is the largest mortgage originator in the U.S. by closed loan units, with 365,000 origination clients and 2.8 million servicing clients as of Q2 2025. RKT would be a massive beneficiary of lower rates. Rocket’s recapture rate (the rate at which clients return for another mortgage) is 83%, more than three times the industry average of 25%. RKT is not just a sleepy mortgage firm. Like everyone else, they’re digitizing. Via their last earnings call, Rocket enables clients to complete the refinance process fully online, from application to rate lock, in under 30 minutes, 24/7. AI tools help bankers connect more efficiently and surface client needs, boosting daily refinance client follow-ups by 20%. HD is another rate-sensitive stock itching for a breakout, which was added to the list on 9/5. Rising interest rates have caused many homeowners to delay major improvement projects, particularly those that rely on financing through home equity lines of credit (HELOCs) or cash-out refinances. This hesitation has created an estimated $50 billion shortfall in home improvement spending over the past five years as customers held off, waiting for borrowing costs to ease, according to HD. In addition, HD is a huge beneficiary of home transactions. New homeowners often invest heavily in remodeling kitchens, bathrooms, or outdoor spaces, while sellers frequently make improvements to maximize resale value. Even smaller projects, like painting, flooring, or replacing fixtures, tend to follow the turnover of a property. According to Quartr, if rates decline, Home Depot could capture a significant portion of this pent-up demand, potentially translating to $10–15 billion in additional sales over the next few years, based on its market share. This would provide a substantial boost to sales growth above the typical 3–4% annual rate, fueling earnings at an already well-run, market-leading retailer. Risk Management: Josh — As you can see in Sean’s chart above, Home Depot is in a Golden Cross right now with its 50-day moving average recently breaking above the 200-day. Traders can use that rising 50-day as a risk management tool – a weekly close below it may be a signal of future chopiness rather than a continuation of the recent uptrend. I like the fact that RSI is still in the 60’s which means the stock is not yet overbought despite the fact that it’s clearly been under accumulation. The chart I want to show you is a five year look stripping out RSI and moving averages so you can focus solely on price action. I’ve illustrated the fact that HD is on the verge of completing a bullish cup-and-handle pattern, one of my favorite setups. This isn’t witchcraft or astrology — the cup and handle is a reflection of buyer and seller psychology. The sellers dried up during the “handle” period at higher prices than when they were selling into the longer, deeper “cup” period. It’s not hard to understand why this particular pattern can be so powerful once it’s complete – it means whoever owned the stock and was willing to sell is probably now out of shares to unload. Bullish. Let’s do Rocket now… The stock has already been a huge winner off the lows of this spring, especially since ValueAct made it clear that they were size buyers. I don’t plan to take any profits for the time being because I think the housing activity recovery is in the early, early days. In the chart below, I am showing you the company’s share price (purple) versus the 30-year mortgage rate (orange). Suffice it to say, if you believe mortgage rates can (and should) descend to 5% or lower as the labor market softens and the Fed loosens policy, this stock could be a very obvious way to express that view. RKT has spent the ice age period getting increasingly aggressive about market share via acquisitions and doubling down on the potential for a comeback. If rates don’t cooperate or upside inflation shocks push back the timetable, this stock is going to react negatively. Above I am showing you year-to-date with a rising 50-day at just under $17. If I weren’t in the name, I might wait for a low-volume pullback into support at around $19 before pulling the trigger setting up a 2 to 3 point risk parameter. Longer-term oriented investors can use $12 as their line in the sand and should strongly consider buying the stock incrementally given its inherent volatility. There will most certainly be bright-red days ahead — I’d be a buyer in those moments. DISCLOSURES: (Josh long Rocket, as stated.) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . 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