Nondepository mortgage companies cut 1,500 full-time employees from their payrolls in January, ending 10 consecutive months of job growth.
Total employment in the nonbank mortgage and broker sector decreased to 333,200 in January, from 334,700 in December, the Bureau of Labor of Statistics reported Friday. The December figures were revised slightly upward from original estimates.
Analysts at Compass Point Research & Trading were anticipating the hiring spree in the mortgage sector couldn't continue in the face of rising mortgage rates.
"Mortgage market activity continues to decelerate as rates remain above 4%, near two-year highs," according to a March 8 report.
"Somehow industry employment still has not contracted based on data through December. This is a bad setup for originator profitability, and it's not clear that forward estimates reflect this challenge," the Compass Point analysts said.
Meanwhile, the U.S. economy created 235,000 jobs in February, compared to 238,000 in January, the BLS reported. There is a one-month lag in BLS reporting of mortgage industry jobs data. The unemployment rate was 4.7% in February, down slightly from 4.8% in the prior month.
Hiring in the construction sector was particularly strong in February, as homebuilders and commercial contractors hired 58,000 new workers in February, including 15,000 residential specialty trade contractors.
"Construction job gains of 58,000 is the best monthly showing in over a decade and implies less bottle-necking to homebuilding in upcoming months," said Lawrence Yun, chief economist for the National Association of Realtors.