As many as one in three refi employees could get pink-slipped if rates continue to rise
Rising rates have already led to massive job cuts in the mortgage industry – and more are likely on the way if the trend doesn’t reverse. According to some experts, as many as one in three refinance employees could get their walking papers if rates continue to hover around 5% or higher.
“When mortgage rates rose from 4% to 4.25%, it didn’t really matter,” Brian Foran, an analyst with Autonomous Research, told The New York Post. “But now that rates are closer to 5% or so, it’s starting to get to the point where monthly mortgage payments are a sticker shock.”
That translates to fewer mortgage customers – which in turn leads to lenders cutting jobs. Wells Fargo has already announced the elimination of 638 mortgage jobs. JPMorgan Chase announced 400 mortgage job cuts, while USAA said it would eliminate 250 and Movement Mortgage fired 180 mortgage workers. BMO Harris recently announced 170 mortgage job cuts.
It’s not just purchase activity that’s slowing. Rising rates are also impacting the refinance business, the Post reported. The Mortgage Bankers Association forecasts refi volume at $425 billion this year – the lowest level since 2000.
Foran predicted that between one quarter and one third of refinancing jobs could be cut during the current cycle, the Post reported.
