Mortgage employment dips, but there are signs of resilience

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April's surge in overall unemployment and its steep drop-off in construction jobs drew concern from mortgage companies. And while hiring in the field was impacted, May's unemployment numbers show some reasons for optimism.

The latest payroll numbers for nonbank mortgage bankers and brokers are down slightly, but hiring in general shows relative improvement. U.S. unemployment — while still high — fell slightly to 13.3% in May from 14.7% in April.

These statistics add to indicators that suggest the impact of the coronavirus on the U.S. economy, while still serious, may not be as bad as feared. Some projections had suggested unemployment could rise as high as 20% before subsiding.

While high unemployment strains borrowers' ability to pay and get loans in ways that hurt mortgage companies, it's offset by low rates driving consumer interest in home loans. That, combined with the broad pool of potential job applicants available, is making hiring attractive to some nonbank and bank lenders.

"We see this as a time to go to the street and attract top talent," said Mike Lantz, chief people officer at Quontic, a digital bank based in New York. Quontic is hiring residential origination professionals in wholesale and retail channels to meet ongoing consumer demand.

Some nonbanks have continued to selectively hire as well despite some concern that they could suffer more strain than banks. Churchill Mortgage, for example, has been building up its staff in the Pacific Northwest.

Early estimates for nonbank mortgage payrolls — which lag numbers for overall employment by a month — totaled 310,800 in April, up from a downwardly revised 311,400 the previous month. Total employment in May was up by 2.5 million, following a loss of 20.5 million jobs in April.

Residential construction industry payrolls also recovered somewhat in May, rising by 9.2% after falling to a low not seen since 2016 the previous month.

"The housing market is helping the economy in recovering from the recession — a role it has traditionally played in previous economic recoveries," said Odeta Kushi, deputy chief economist at First American, in an emailed report.

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Employment data Nonbank Mortgage brokers Bureau of Labor Statistics Purchase Mortgage rates Economy Coronavirus