RBC Capital analysts downgraded NMI Holdings, Inc. (NASDAQ:NMIH) to sector perform from outperform and lowered their price target to $20 from $27 as housing trends become more challenging due to rising interest rates.

Given relative margins, growth dynamics, and underwriting exposures, the analysts see other opportunities as more attractive over the near term, despite the company’s shares trading below book value.

Previously, the analysts expected the company would grow faster than competitors and accordingly benefit from expense leverage. While they still continue to believe the company will experience strong growth, the analysts think the size of the mortgage pie is likely to shrink resulting in less expense leverage than originally anticipated.