Nonbank mortgage hiring persists in July, with more growth to come

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Nonbank mortgage bankers and brokers' collective payrolls expanded by nearly 2% on a consecutive-month basis and were up 9% from a year ago in the Bureau of Labor Statistics' latest report.

The industry employed an estimated 323,300 in July, preliminary figures show. The BLS also revised June's mortgage job estimates up by 100 to 318,100. A year ago in July, industry employment numbers totaled 296,200.

While employment typically ebbs as home buying slows in the fall, several nonbanks have ambitious hiring plans in the works that call for them to add thousands of workers by year-end.

Examples include a plan announced this week by Mr. Cooper to onboard 2,000 workers. In July, Freedom Mortgage announced interest in hiring another 3,000 employees, and AmeriSave Mortgage Corp. said it was setting out to recruit 2,000.

Overall U.S. jobs — which are reported with less of a lag than mortgage industry estimates — were up by 1.4 million in August, when the unemployment rate fell to 8.4%. When adjusted for a misclassification error, the BLS has been contending with since March, the unemployment rate was 9.1%.

In comparison, total employment was up 1.8 million in July, when there was a 10.2% unemployment rate, or 11.2% on an adjusted basis.

Prior to the coronavirus outbreak in the United States, the unemployment rate was closer to 4%. Unemployment rates were last this high during the Great Recession, when they rose to 10%.

Housing has been insulated from the pandemic's broader effect on the economy by low rates and the fact that the types of industries suffering the most primarily employ renters rather than homeowners.

But eventually, if higher levels of unemployment in the broader market are sustained it could dampen housing demand and consumers' ability to qualify for loans, according to Odeta Kushi, deputy chief economist at First American Financial Corp.

"Housing has remained immune due to demographic demand and the Fed policy keeping rates low, but it cannot remain immune to the impact of homeowners having less household income," Kushi said in an email.

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Employment data Nonbank Mortgage brokers Bureau of Labor Statistics Mortgage rates Recruiting First American Financial Corp. Mr. Cooper Freedom Mortgage