Nondepository mortgage companies cut another 1,500 workers in March as the housing market's peak season got underway, suggesting that even with business potentially picking up, lenders remain cautious about hiring.
Workers employed by nonbank mortgage bankers and brokers during the month totaled 318,000, according to the Bureau of Labor Statistics. That represents a more than 4% decline from 331,300 in March 2018 and less than a 1% drop from a downwardly revised 319,500 workers
Although nonbank mortgage employment continues to decrease, overall employment is increasing in ways that suggests prospects for the housing finance industry will be better this spring.
Additions to total U.S. jobs, which the BLS releases one month ahead of nonbank mortgage numbers, were higher than they were in downwardly revised estimates for March. April's increase also was higher than February's upwardly revised additions.
Employment across all industries increased by 263,000 in April, 189,000 in March and 56,000 in February, according to the latest BLS estimates. Unemployment fell to 3.6% from 3.8%.
"With hiring so strong, the unemployment rate has fallen to its lowest level since 1969, and wages continue to grow at a strong pace. A healthy job market is the most important support for the housing market," Mike Fratantoni, senior vice president and chief economist at the Mortgage Bankers Association, said in a press release.
While this bodes well for the kind of wage growth that encourages home purchases, whether that growth is sustainable in the long term will depend on the labor participation rate of people in their prime working years.
"For wage growth to continue its upward trend, the prime-age labor force participation must continue to rise," First American Deputy Chief Economist Odeta Kushi said in a press release.
Another employment-related development that could affect prospects for housing finance companies is the availability of labor in the residential construction industry, which plays a key role in the market's ability to address home inventory shortages.
"For housing, while overall construction jobs rose strongly, residential construction added fewer than 1,000 jobs, which was a disappointment. The residential construction labor force is one of the constraints limiting builders' ability to increase supply," Doug Duncan, chief economist at Fannie Mae, said in a press release.
