Nonbank mortgage jobs plummet for third month in a row

Nonbank mortgage banks and brokers cut payrolls for the third consecutive month during July as anecdotal reports of widespread industry layoffs continued.

The number of mortgage jobs at non-depositories dropped to 405,000 from a downwardly revised 409,800 in June, according to the Bureau of Labor Statistics. Since April, more than 20,000 mortgage banking and brokerage positions have been cut, primarily at lenders.

Meanwhile, the broader job market — which the BLS releases numbers for with less of a lag than mortgage banking and brokerage estimates — slightly underperformed consensus estimates by adding 315,000 positions in August. The unemployment rate rose to 3.7% from 3.5%

Federal monetary policy officials are unlikely to reconsider their plans to continue putting upward pressure on rates in response to the fact that job numbers were a little weaker than expected, according to Odeta Kushi, deputy chief economist at First American.

“The Fed may feel a little sigh of relief that the super-hot labor market is showing some signs of slowing, but this report is not enough to alter the Fed’s course,” Kushi said in a press statement issued Friday.

Taken together, the latest numbers show that while the rise in consumer costs has diminished some rate-driven mortgage demand, employment in the broader economy is still strong enough to sustain a certain amount of home-purchase lending.

“The housing market is reeling from the hit to affordability from the spike in mortgage rates and much higher home prices,” Mike Fratantoni, chief economist at the Mortgage Bankers Association, said in a press statement Friday. “While these data don’t promise any near-term relief on rates, the strong job market will continue to support housing demand.”