Mortgage job estimates are as low as they haven’t been seen since late 2020

The latest decline in non-bank mortgage banker and broker employment forecasts shows that the increase from 2021 has been completely erased.

Employment in the mortgage industry fell to 390,800 in September from a revised 401,000 in the previous month, according to preliminary data released by the Bureau of Labor Statistics on Friday. This is the lowest number since employment was 388,700 in November 2020.

But it will take far more job cuts to return the mortgage industry numbers to the standard composition that predates the extraordinary housing boom of the last two years. Mortgage employment peaked at around 430,000 during the boom, but before the boom, the industry employed just under 310,000.mortgage banker May need to cut at least another 25% to 30% of staff According to one industry economist, the workforce needs to be scaled to match current lending volumes.

Recent cuts and other exits have reversed the rise previously seen in the mortgage broker segment, bringing the number of these third-party originators slightly lower to 131,000, according to the bureau’s latest stats. . By comparison, an estimated 132,600 people were on broker payroll in August, according to the latest revision of figures.

Multiple companies including loan depot, Amerisave, Mountain West Financial When Finance of Americawhich has recently announced the complete closure of its third-party origination division, as the pricing of these loan channels has become so competitive.

More broadly, job opportunities in the United States continue to expand. Domestic employers said he added 261,000 jobs in October. (Overall employment numbers are reported later than the categories used to calculate mortgage bankers’ and brokers’ estimates.) Although the unemployment rate remained historically low in October, increased from 3.5% to 3.7%.

Unemployment has risen slightly and consumer wages have been weak in recent figures, but economists generally believe that these developments are telling monetary policymakers that demand for higher interest rates is weakening demand for mortgage originations. I think it is unlikely that I will be persuaded to quit.

“While slower wage growth may help ease inflationary pressures, we expect the Fed to continue with its current tightening policy,” said Joel Kang, vice president and deputy chief economist at Mortgage. There are,” he said. The Bankers Association said in a memo on job numbers issued Friday.

Rising interest rates didn’t stop construction worker employment from rising last month, but numbers in this segment looked a little weaker than before.

“Residential buildings increased 7.7% compared to pre-pandemic levels, while non-residential buildings remained 4.8% below pre-pandemic levels. Jobs in both residential and non-residential sectors fell.” Odeta Cusi, the first American deputy chief economist, said in a note on the latest employment figures.

“The construction industry has faced a skilled labor shortage for years. [job] With so many homes under construction, we are profiting in a cooling market,” said Khushi.

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