Mortgage Jobs Cut as Jobless Rate Jumps

Mortgage companies cut their payrolls by 3,900 full-time employees in April, and it looks like the industry will continue to shed jobs now that the unemployment rate has jumped to 5.5%, dashing hopes for a recovery in the housing market this year. The U.S. Bureau of Labor Statistics reported that employment in the mortgage banker/broker sector fell from 360,700 in March to 356,800 in April. But the real bad news for the industry is that Friday's jobs report showed an increase of 861,000 (to 8.5 million) in the number of unemployed people in May, the biggest monthly increase since 1996. Wells Fargo & Co. senior economist Scott Anderson said the dismal jobs report confirms that the downturn in the housing market will be prolonged. He said he expects house price declines to continue into 2009 and that a bottom for home sales might be pushed back to the end of the year or the first part of 2009. "This is what we were afraid of," Mr. Anderson said, that a weakening jobs market would compound the problems in the housing market.