Mortgage lenders have fewer jobs as hopes of rate relief fade

mortgage broker Job creation increased slightly, but overall hiring remained under pressure amid strong overall U.S. employment, further denting hopes for a rate cut.

The estimate for brokerage jobs in February was revised up to 86,200 from 85,500 in January, according to the Bureau of Labor Statistics. Real estate credit jobs fell to 183,700 from 185,800. The total number of non-bank mortgage banker and broker jobs fell to 269,900 from January. 271,300 years.

The U.S. Bureau of Labor Statistics reported that U.S. employment increased by 303,000 jobs in March, exceeding consensus expectations of about 200,000 jobs, and the unemployment rate fell to 3.8% from 3.9% last month.

“Rate cut expectations have dropped significantly, with most expecting three or fewer rate cuts,” First American chief economist Odeta Kushi said in a commentary on the jobs data. He noted that compared with forecasts for the end of 2023, the number of rate cuts has dropped significantly. Expectations have dropped as many as six times. This year or seven.

Additionally, she noted that mortgage rate forecasts are being revised downwards, noting Fannie Mae’s Recent Year-End Headcount Increase It rose to 6.4% from the previous forecast of just under 5%.

While the number of broker positions is smaller than the number of positions offered by lenders, broker positions tend to be less volatile in markets with relatively higher interest rates because third-party originators Advantages in reaching home purchase borrowers This is even more pronounced in that environment.

Brokers may face challenges, however, as lenders often seek cost savings through third-party originations and margins can fluctuate over time as the business cycle unfolds. Multichannel non-bank institutions outperformed peers in the fourth quarter.

The startup industry typically looks at staffing for possible business growth during the spring home-buying season, so the latest employment data and interest rate forecasts may lead to some forethought on how much companies want to do that when making decisions.

Given that this is likely to be a peak business season, investing in loan production positions this spring could help, but companies must consider how much return they can get from it.

Mortgage rates are currently down slightly from last year’s peak. Give some recent borrowers incentives to refinance Although many older people “locking” Because their loan rates are at record lows.

“Mortgage rates at 6.4 percent are still lower than current rates, so buyers on the sidelines may still see increased motivation to purchase at the end of the year,” Kush said.

Another potential consideration for business sponsors in staffing decisions is the availability of affordable housing inventory.

Mike Fratantoni, chief economist at the Mortgage Bankers Association, said the latest employment data is promising on that front.

“While job growth remains concentrated in sectors such as health care, government, leisure and hospitality, there has also been an increase in hiring in construction, providing a niche for the housing market given the lack of supply,” he said in comments published on Friday. “

The latest Bureau of Labor Statistics data showed a net gain of 39,000 jobs in the construction industry, according to an analysis by the National Association of Realtors, which noted in comments Friday that the strength in industry employment does have some benefits for the housing industry. .

“There will be more housing supply in the coming months. More jobs means more potential housing demand in the future,” NAR chief economist Lawrence Yun said in the report.