Market Minute: Weekend Spotlight: Better.com CEO (BETR)
Existing Home Sales for February rose 4.2% to 4.26 million units, more than expected. Vishal Garg, CEO of Better.com (BETR), joined Market On Close to discuss the mortgage and real estate market. He thinks people are looking to buy what they can now and refinance later, pointing to a surge in pre-approval activity on his site beginning “in the first week of February.”
Founded in 2014, Better.com (BETR) proclaims that it is the “first AI-powered Mortgage” company and has already funded “over $100 billion.” Bankrate, which offers a detailed analysis of the company and its services, scores them at 4.8, calling their claim to fame a “completely digital process (with the exception of some portions of the closing.)” Their AI, named Betsy, is “doing over 115 thousand customer interactions a month,” Garg says, which could point to another potential upside surprise in March.
Better also offers insurance, inspection services, and home equity credit lines, with an emphasis across their website on speed. In fact, they say its pre-approval system lets users check potential rates and buying power in “as little as 3 minutes.” Garg says the competitive rates Better offers is attracting customers.
Investopedia explains that mortgage lenders make money through fees, loan servicing, yield spreads (the difference between the rate the lender borrows at from a larger bank vs the rate they offer the consumer), and mortgage-backed securities – the business of packaging a number of loans and selling them on financial markets (you may remember them from The Big Short). Closing costs also fall into this category.
However, Better operates differently: Garg says that unlike other mortgage lenders, they don’t keep the mortgages on the books, acting solely as an intermediary. He adds that they average around “$7K a loan” in revenue.
Since a lot of the money comes up front, Better and other mortgage lenders are motivated to originate loans – meaning they depend on housing market demand and the Fed’s interest rate moves. Garg said that Better.com is “sitting on” over 1.5 million preapproved customers that haven’t been able to find a place to purchase. Affordability remains a major issue. He points to the 35% debt-to-income ratio of prospective buyers – an all-time high. Garg also discusses how the age of homebuyers has risen, with 2nd-time homebuyers almost 60 on average.
On the stock side, BETR has had a great 2025 (+40% since Jan. 1) but is down 46% year-over-year. In its recent 4Q report, it posted a net loss of $59 million vs $51 million last year but grew total loans by over 100%. Recently to Housing Wire, Garg said Better’s AI could underwrite 75% of mortgages by the end of the year. He expects AI to improve their total volume, and on the earnings call, Better executives outlined cost reductions and other streamlining.
Overall, Better is making a bet on AI for the future of mortgage underwriting. While this translates to more volume capacity, will it make for a better customer experience in the high-stakes decision of buying a house? Investors must also decide whether they think the housing market will continue to see strength, or if this is a blip in a weakening economy.
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