Mortgage companies keep hiring, despite dwindling loan volume
Hiring by nonbank mortgage companies surged in May as the sector added 2,800 new full-time employees.
Employment among nonbank lenders and mortgage brokers rose to 336,700 in May from 333,900 in April. It marks the third straight monthly gain in employment for this sector, the Bureau of Labor Statistics reported Friday. April's estimates were revised downward by 300 jobs.
"Builders are selling virtually everything they build and a rising share of new home sales are for homes that builders have not yet started," according to a June 5 Wells Fargo Securities report.
The WFS economists estimate sales of new homes will increase 12.3% this year to 630,000 units — the highest since 2007.
However, the buyers face tight inventories of existing homes for sale. "It's clear the critically low inventory levels in much of the country somewhat sidetracked the housing market this spring," Lawrence Yun, chief economist for the National Association of Realtors, said in a June 28 press release.
"Buyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast," he added.
However, refinancings were stronger than expected in May. Fannie Mae recently tweaked its forecast to account for more refi optimism. And the Mortgage Bankers Association recently upped its forecast for refinancings, "after seeing a period of low rates and more refinance activity in our Weekly Refinance Applications Survey as U.S. political uncertainty, among other reasons pushed rates lower."
The MBA's forecast calls for $528 billion in refinancings in 2017, up $13 billon from its original projections. Refinancing activity totaled $901 billion in 2016.
Meanwhile, the U.S. economy created 222,000 jobs in June, compared to an upwardly revised 207,000 in May. The unemployment rate rose slightly to 4.4% from 3.4% in May. Industry-specific BLS estimates lag one month behind its national data.
"Today's positive jobs report featured strong hiring in June, upward revisions to job growth in the prior two months, an increase in the average workweek, and rising labor force participation," Fannie Mae Chief Economist Doug Duncan said in a statement Friday. "These broad-based improvements put the labor market on par with the solid performance experienced last year."