WASHINGTON — Nonbank mortgage lenders and brokers cut 2,000 employees from their payrolls in January, which dropped total employment in the sector below 300,000 again.
The Bureau of Labor Statistics reported Friday that employment in the nonbank mortgage sector fell to 299,000 in January
The data historically shows a reduction in mortgage employment in January and an upward revision might show up in next month's jobs report. That's because loan production dropped off in the fourth quarter, but has been rising this year. In addition, job growth in the overall economy has remained strong.
Meanwhile, volatility in the financial markets pushed interest rates down and mortgage lenders are seeing higher demand for refinancings.
"Interest rates fell in January and February and refinancing applications picked up," a Stonegate Mortgage executive said during a March 3 earnings presentation.
Stonegate's average lock volume per business day increased to $52.8 million during the first two months of 2016, compared to $44.1 million per day in the fourth quarter of last year.
Yet rising house prices and tight inventories are expected to slow the growth in home sales this year. But 2015 was a pretty good year.
"Last year was the best year we have had in 10 years," said Dave Linger, president of Re/Max in a recent interview. So it's too early to "cry uncle.”
The BLS reported Friday that the U.S. economy created 242,000 jobs in February and the bureau revised its January jobs number to 172,000, up from 151,000 as originally reported.
"Over the past three months, job gains have averaged 228,000 per month," the Labor Department said. (The BLS mortgage industry employment estimates lag national reporting figures by one month.)
Bank of the West Chief Economist Scott Anderson said Friday's jobs report "raises the odds" the Federal Reserve will approve another rate hike. But he indicated that the Federal Open Market Committee will likely wait until June.
Fannie Mae Chief Economist Doug Duncan said the jobs report should "calm recession fears." On the housing front, he expects a modest gain in home sales this year due to rising prices and tight inventories. "Today’s jobs report is consistent with our view of an affordability-constrained housing expansion," Duncan said in a statement.
