Nondepositories in the mortgage business cut 2,900 more jobs in February, bringing industry employment to its lowest point in nearly three years.
Nonbank mortgage bankers and brokers employed 320,200 workers during the month, according to the Bureau of Labor Statistics. That marks a decline of less than 1% from a downwardly revised 323,100 in January, and is down almost 4% from 332,200 a year ago.
Many nonbanks in the mortgage business may be still struggling to generate a profit. The business generated an average $200 net loss per loan in the fourth quarter of last year, according to the latest available report from the Mortgage Bankers Association.
But nonbank mortgage bankers and brokers expect to get a lift from spring home buying, gains in the larger economy and a recent dip in rates.
Overall employment estimates, which the BLS releases one month ahead of nonbank mortgage job numbers, increased by 196,000 in March. In comparison, there were 33,000 jobs added in February and 312,000 jobs added in January, when the BLS made upward revisions to previous estimates.
“The 196,000 jobs added to the U.S. economy in March reversed the slowdown in February, but more importantly, it showed that job creation overall remains robust,” Joel Kan, assistant vice president of economic and industry forecasting at the MBA, said in a press release.
“The unemployment rate stayed at 3.8% and is still well below historical averages. The 3.2% growth in hourly earnings is good news for the housing market, as wage growth continues to more closely align with home-price gains. Additionally, we saw a bounce back in construction employment last month, with a decent gain of 16,000 jobs.”
While the gain in construction employment in March will gradually add to the supply of new homes, “labor shortages across the industry remain a concern,” Doug Duncan, chief economist at Fannie Mae, said in a press release.