Drop in nonbank mortgage employment erases earlier gains

Employment among nonbank mortgage lenders and brokers fell slightly in March, erasing the unexpected gains in the previous month.

Nondepository origination firms employed 337,200 workers in March, according to the Bureau of Labor Statistics. That's down from 339,500 jobs from February, revised BLS estimates show. In March 2017, there were 331,500 full-time workers in the nonbank mortgage industry.

Mortgage lenders may adjust employment based on workload, but the market for productive sales employees has been competitive, so origination units have been reluctant to cut those positions.

And the outlook for mortgage production volumes and home sales has been "mixed," according to Fannie Mae's economists.

"Purchase mortgage applications fell sizably in February and only partially recovered in March," Chief Economist Doug Duncan and directors Orawin Velz and Hamilton Fout noted in a recent report.

Mortgage applications overall declined every week during April, when interest rates were volatile, according to the Mortgage Bankers Association. But average mortgage rates tracked by Freddie Mac got slightly lower as May got underway and the housing market remains active.

A rebound in construction employment that showed up in the most recent employment numbers "suggests that building will continue its upward grind," Duncan said in a separate report.

The BLS industry-specific estimates lag the national jobs data by one month. Jobs across all industries in April rose by 164,000 as compared a downwardly revised addition of 324,000 workers in March. Unemployment across the board fell in April, slipping below 4% for the first time in months.

"Total nonfarm payroll jobs have now increased every month since October 2010," said First American Chief Economist Mark Fleming in a report.