UWM Holdings: A Tentative Nod for ’26

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UWM Holdings. The name itself feels…substantial. Like a mid-century law firm. Or a particularly stubborn strain of mold. Since going public in 2020, it’s been less a portfolio darling and more a cautionary tale whispered among analysts. I remember one fellow, Barry, explaining the downturn with a dramatic flourish and a half-eaten bagel. He insisted it was “tectonic.” I just nodded. Barry always had a flair. Anyway, UWM, like many things, took a beating when interest rates decided to stage their own unwelcome comeback. Earnings plummeted, naturally. It’s always natural, isn’t it? The things that plummet.

There have been little rallies, little flares of hope, but they’ve always fizzled. Like trying to start a charcoal grill with damp kindling. Shares have been inching up again in 2026, though. Which is…interesting. It’s enough to make you wonder if maybe, just maybe, things are different this time. Or if I’ve simply spent too long staring at spreadsheets.

A Macroeconomic Sigh of Relief?

Interest rates, obviously, are the key. It’s not rocket science. Though, honestly, sometimes dealing with mortgage-backed securities feels more complicated than rocket science. UWM, as the parent company of United Wholesale Mortgage, is heavily reliant on people actually being able to afford houses. Go figure. Rates are down, at least a bit, and that’s…encouraging. Though, I’m always wary of anything described as “encouraging” in financial reports. It usually means “slightly less terrible.”

Then there’s the Trump factor. I read that he posted something on social media about having his “representatives” repurchase $200 billion in mortgage bonds. It was…a post. And it raised a lot of eyebrows. Who are these representatives? And would Congress even go along with it? It feels less like a policy proposal and more like a particularly chaotic thought experiment. Still, the market reacted. Because, of course, it did. It’s like a startled cat.

I’m not predicting a return to the post-COVID housing boom. That was…a moment. A strange, feverish moment. But lower rates could nudge things in the right direction. It might even justify my continued employment. Which, frankly, is a significant consideration.

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Beyond the Rates: A Technological Hail Mary

Even if the macroeconomic stars don’t align, UWM is trying something else. They’re throwing a lot of money at AI and automation. It’s the tech solution to every problem, isn’t it? Apparently, automating loan underwriting and servicing could save them over $100 million. Which sounds…optimistic. I’ve seen automation projects go sideways. It usually involves a lot of frustrated IT people and a growing pile of sticky notes.

And then there’s the proposed acquisition of Two Harbors Investment. Another REIT. More complexity. They claim it could unlock another $150 million in synergies. Synergies. It’s a word that makes me tired. But, if it works, it could be a genuine boost. Though, I’m reserving judgment. I’ve learned to be skeptical of anything described as a “game-changer.”

Should You Take a Chance?

UWM Holdings has jumped nearly 40% this year, which is…noticeable. At around 13.5 times forward earnings, it’s reasonably priced, at least compared to other mortgage-focused companies. It’s not wildly expensive, which is a plus. My aunt Mildred once told me, “Never pay too much for anything, dear.” She was a very practical woman.

The Q4 2025 earnings report next month will be crucial. Strong results, coupled with optimistic guidance, could really move the needle. Investors might be willing to bid up the stock, anticipating a continued recovery. It’s a gamble, of course. All investing is a gamble. But, factoring in the 6.9% forward dividend yield, UWM Holdings might just be one of the better financial stocks to own in 2026. It’s not a slam dunk, but it’s…interesting. And sometimes, in this business, that’s enough.

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2026-01-20 10:02