Mortgage jobs recorded small seasonal gain despite layoffs

The latest estimates for mortgage banker and broker payrolls show lukewarm interest in hiring as the spring homebuying season got underway, despite an ongoing wave of industry layoffs,

The number of people employed by nonbanks rose to 426,700 in April from an upwardly revised 424,200 in March, according to the statistics published Friday by the Bureau of Labor Statistics. Payrolls are still larger than a year ago, when jobs totaled 421,600. However, industry hiring is below its peak of 428,000 in January.

Meanwhile, overall employment (which the BLS reported the same day, but with less of a lag than nonbank estimates) grew more slowly in May with the addition of 390,000 jobs. Despite the slowing, job numbers are considered still strong enough to support a housing market that’s been softening a little due to an uptick in supply. They also are strong enough that they will likely keep monetary policy officials on a path where they’ll want to continue putting some upward pressure on interest rates.

“Today’s report will likely support additional 50-basis-point hikes by the Federal Reserve at the next two [Federal Open Market Committee] meetings,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association, in a press statement. 

But mortgage rates generally have softened recently as the market has priced the Fed’s actions in, and the downsizing of its balance sheet that technically began this week will likely take a long time to unfold. 

Also, even with the increase in mortgage financing costs seen to date and the supply of homes growing, the balance of the market still hasn’t tipped entirely toward buyers, according to Fratantoni.

“Although housing inventory is beginning to increase, demand continues to exceed supply even as mortgage rates have spiked,” Fratantoni said.
 
Increased employment in the construction industry has likely contributed to some of the inventory gains. Residential construction jobs, including specialty contractors, rose by 16,700 in May.

“Residential construction employment currently exceeds its level in February 2020,” said Jing Fu, director of forecasting and analysis at the National Association of Home Builders, in a report issued Friday.

While the job numbers show housing demand generally grew as new supply did in the past month, employment didn’t increase across the board.

“The retail trade sector posted a large decline of 61,000 jobs in May, possibly a reflection of firms attempting to recalibrate staffing levels following a jump in hiring at the beginning of the year to compensate for the omicron surge,” Doug Duncan, chief economist at Fannie Mae, noted in a press statement.