Employment in the mortgage sector increased for the second consecutive month in April as the spring home purchase season began.
Nonbank mortgage companies added 900 jobs during the month, bringing total employment in the sector to 334,200 from a revised 333,300 in March, the Bureau of Labor Statistics reported Friday.
The number of mortgage and nonmortgage broker jobs increased by 500 to 95,000, while real estate credit employment was up by 400 jobs.
But the outlook for home sales remains mixed as strong demand, primarily from first-time homebuyers, is being countered by a lack of inventory. Pending home sales fell 1.3% in May after a 0.9% decline in April, according to the National Association of Realtors.
"Residential construction employment, which needs to expand to increase the pace of housing starts and increase the housing stock, was a disappointment with only 2,000 new jobs reported," said First American Financial Chief Economist Mark Fleming.
The pace of construction-job growth remains a significant impediment to more housing starts. Every 1,000 new construction jobs added equates to a 1,900-unit increase in the annualized pace of housing starts, he said.
"This month's increase in residential construction jobs implies an increase of less than 4,000 housing starts. Until the supply of residential construction labor increases and housing starts pick up the pace, expect continued supply shortages in many housing markets," Fleming said.
Industry-specific BLS estimates lag one month behind its national data. Total nonfarm payroll employment increased by 138,000 in May, an improvement from a revised increase of 174,000 jobs in April, BLS said. Combined with an additional revision to a gain of 50,000 for March, employment gains for the two months were 66,000 less than previously reported.
The unemployment rate fell to 4.3%.
"The labor market has lost some steam," said Fannie Mae Chief Economist Doug Duncan. "The headline payroll gain surprised to the downside and came on top of sizable downward revisions to the prior two months."
Combined with other economic indicators, including declining auto sales, this month's report "raises questions about the recent hawkish tone of Fed officials, who have hinted at potentially more rate hikes and a start of the process of balance-sheet shrinking this year," Duncan said.