after being fired After finishing a job with mortgage provider Better.com in March, Charmaine Steele interviewed at eight other mortgage companies. Each has since announced its own layoffs, she told her Axios. At least one company has gone out of business.
Important reasons: this is lean time in real estate business. A slowdown is a wake-up call for the economy as a whole, and the labor market rarely weakens when overall employment is strong.
- With interest rates hitting 14-year highs and lending activity dropping significantly from the peaks of the past two years, job cuts and closures have occurred with alarming frequency.
“The housing market tends to lead It’s the broader economy, both in and out of recession.
- Steele, 30, of Charlotte, North Carolina, says the job search has been tough. “She didn’t hire anyone,” she said.
State of play: On Tuesday, real estate broker Compass announced a second round of layoffs. Just the day before his Opendoor, which sells homes, said it had lost 42% of its trading in August.
- Steele’s former employer, Better.com, has made four layoffs. famous failure Mass layoffs by Zoom in December 2021, Tech Crunch reported.
- Real estate firm Redfin laid off 8% of its workforce in June.
- Rocket, one of the largest non-bank mortgage lenders, has cut interest rates twice. Simply put, Rocket, who in 2021 was a meme stock that was trading above $25, is now below $8.
- A small fintech in the mortgage sector Reali,closed. sproutMortgage companies also went out of business.First Guarantee Mortgage Corporation Submitted to Chapter 11.
By numbers: “Mortgage banking and brokerage firms cut 3,600 full-time jobs in July,” reports Inside Mortgage Finance, citing the latest BLS data. “Few people are immune. If the lender is not cutting headcount, we are offering early takeover packages.”
Catch up soon: Mortgage companies have been hired like crazy in recent years due to low interest rates increased refinancing.Things have been great for workers in the industry for a while – some companies were paying seven-figure contract bonuses, Fratantoni said market watch soon. (An MBA spokesperson confirmed the eye-popping number on Axios Tuesday.)
- After working as a real estate agent, Steele says she was earning around six figures at her first job at a lender, Better.com. She now works in the small business lending sector and is down 50%.
To the point: For those who have had financial crisis flashbacks, this is different. Currently, two-thirds of his mortgage business is in the realm of small non-bank lenders, and Fratantoni estimates there are 4,500 of his firms in the sector.
- Banks have also scaled back their mortgage business, but overall exposure to housing has dropped significantly in recent months.
- And the chances of systematic spillovers like we saw almost 20 years ago are much lower. Improved underwriting standards mean that borrowers are getting better credit (foreclosure rates are still low) and most borrowers have mortgages. at a rate of less than 5%.
Editor’s Note: This article has been corrected to indicate that Redfin’s layoffs occurred in June instead of August.