Mortgage companies are cutting jobs at a faster pace, and a survey of mortgage lender sentiment indicates that more job cuts may be coming.
With mortgage rates and home prices rising and inventory remaining low, the mortgage market is facing some challenges. Unfortunately, many companies have responded to those challenges by slashing jobs.
Movement Mortgage recently announced that it would pink-slip about 180 employees nationwide. Denver-based LenderLive slashed nearly 60 jobs in its Michigan office as it consolidated its origination business. In August, Wells Fargo announced several rounds of cuts, resulting in the elimination of more than 600 mortgage jobs. USAA announced that it would cut around 265 mortgage and real estate jobs. And last week, JPMorgan Chase announced that it would eliminate about 400 positions in its mortgage banking division.
Lenders said that current market conditions were driving the job cuts.
“The mortgage market, as a whole, is having some challenges,” said Matt Hartwig, spokesman for USAA. “This is about our ability to remain competitive.”
“Purchase demand has declined as a result of an ongoing shortage of new and resale housing in our markets and demand for refinance mortgages has also declined in the face of rising interest rates,” HomeStreet said in a June statement announcing 127 job cuts.
Mortgage lenders everywhere report flagging demand. In Fannie Mae’s mortgage lender sentiment survey. The net share of lenders reporting demand growth in the third quarter and the share reporting growth expectations for the next three months fell to their lowest levels in the survey’s history.
The survey also found that 44% of lenders said that they felt staffing reductions would be a key driver of increased profit margins. That’s up from just 13% in the second quarter, and at its highest level in years.