Nonbank mortgage lenders and brokers added 3,200 employees to their payrolls in July as hiring in the mortgage sector rose for the sixth straight month.
Friday's job report shows employment in the mortgage banking and broker sector rose to 297,100 in July, up from 293,900 in June, according to the Bureau of Labor Statistics. The June number was revised upward by 400 full-time positions.
The increase in hiring reflects an improved housing market and economic conditions. The
The Bureau of Labor Statistics' industry-specific estimates lag its national reporting by one month.
Meanwhile, slowing global growth and a strong dollar should be favorable for the housing market, according to the economists at Wells Fargo Securities. "Interest rates are also likely to rise more slowly than they would otherwise and mortgage rates should stay lower for even longer,” a Sept. 1 Wells Fargo Securities report said. They predict that new-home sales will rise 21% this year and by 19% in 2016.
In another good sign for housing finance, the Federal Deposit Insurance Corp. reported Wednesday that the wholesale operations of banks are providing more liquidity for the mortgage market. Banks purchased $96.5 billion in one-to-four family loans from mortgage companies in the second quarter. That is up 17% from the first quarter and the highest level of wholesale activity since the fourth quarter of 2013.
Overall, the U.S. economy created 173,000 jobs in August compared to an upwardly revised 245,000 in July, a slower pace than in the past year. "In the 12 months prior to August, employment growth averaged 247,000 per month," according to BLS commissioner Erica Groshen. The unemployment rate fell to 5.1% in August from 5.3% in the prior month.
While the August jobs number came in below estimates, wage growth and hours worked showed improvement, which could make the Federal Reserve's decision to increase interest rates a tough call. "If the Fed thought their decision was complicated before, this morning's employment report will now make it that much more challenging for the Fed to reach – a unanimous – decision in September," said Stifel chief economist Lindsey Piegza.
Despite the overall weakness in hiring during August, Fannie Mae chief economist Doug Duncan expects the jobs number will be revised upward in the next BLS report. "While the Fed could find reasons to delay raising rates, including increased downside risk for inflation and financial instability, we believe that it will not find one in this jobs report. We continue to call for a September lift-off, with a one-and-done hike this year on the way to normalizing monetary policy going forward," Duncan said in a statement Friday morning.
