The New York City-based startup, which was founded in 2014, on Wednesday announced that it has completed its merger with Aurora Acquisition Corp., a special-purpose acquisition company, in a transaction that takes the company public. Better will begin trading Thursday on the Nasdaq under the ticker symbol “BETR.”
Mortgage lending has taken a big hit over the past year, after the U.S. Federal Reserve hiked interest rates to quell inflation. While inflation is still above its 2% target, with the July inflation rate at 3.2%, there may be more hikes to come. And though hikes don’t directly push up mortgage rates, the market’s expectation of monetary policy tightening impacts the 10-year Treasury note, which in turn causes rates to rise.
Lenders have tightened costs, and that number has since dropped to a loss of $534 on each loan they originated in the second quarter of 2023. But lenders find it hard to drum up business. Homeowners see little reason to refinance, and home buyers are feeling the sting of higher rates that are shrinking their budgets. In some parts of the country, buyers are also struggling with few home listings, leading to low inventory. Sales of previously-owned homes were down 2.
The company disclosed in a Wednesday release that its combination with Aurora gives it access to $565 million in fresh capital, including a $528 million convertible note from SoftBank affiliates and additional common equity from funds affiliated with NaMa Capital. “We believe that we’re going to come out of this abyss in the mortgage market stronger and faster than anyone else and well-capitalized,” he added.