Payrolls at nondepository mortgage bankers and brokers inched down as spring homebuying ended, according to the latest estimates from the Bureau of Labor Statistics.
The slight drop in representative payroll estimates to 340,000 from a downwardly revised 341,500 the previous month suggests some seasonality has returned to the market.
Spring homebuying this year boosted second-quarter volumes markedly above those seen in the previous fiscal period for the first time in two years, according to a report that Attom, a curator of land, property and real estate data, released Thursday.
The number of mortgages originated rose 21% on a consecutive-quarter basis to 1.56 million but was still 38% lower than a year ago.
“It looks like owners took advantage of the small rate drop to refinance existing loans, while a jump in mortgages for purchasers was likely fueled by a number of forces,” Attom CEO Rob Barber said in the report.
May appears to have been the strongest month for industry hiring this year, when job numbers peaked at an upwardly revised 343,900.
Meanwhile, in broader employment data that the BLS reports with less of a lag than industry estimates, the United States added 187,000 jobs in August as compared to a downwardly revised 157,000 the previous month.
“With the markdowns in the rate of job growth for June and July noted in this report, the cumulative effect is a noticeable slowdown in the job market,” said Mike Fratantoni, chief economist, Mortgage Bankers Association, in a report issued Friday.
Unemployment rose to 3.8% from 3.5%, as more people that left the job market returned to it but found it difficult to obtain work. The annualized rate of wage growth was a little slower at 4.3%.
The rate of wage growth is still likely above the level monetary policymakers would like to see given their 2% inflation target, but other employment numbers might deter further rate hikes, according to Fratantoni.
“This report should be enough for the Fed to keep the federal funds target rate on hold at its next meeting,” he said.
Some relief from rate pressure would be welcome in the mortgage market given a rise in financing costs since spring that’s likely contributed to the dip in industry hiring.
“With mortgage rates near 7%, consumers are feeling the pinch,” said Odeta Kushi, deputy chief economist at First American, in a report issued Friday.
However, there’s still enough household formation in the market to compel builders, who have shown a willingness to make selective price concessions, to provide additional supply.
“Demographic tailwinds from millennials aging into their prime homebuying years and a lack of existing-home inventory means new home construction is essential in meeting shelter demand,” Kushi said.
Residential construction jobs increased by 2,400 in August, Kushi noted.
“You need more hammers at work to build more homes. That’s why residential building jobs are still up more than 10% compared with prepandemic levels, despite the rate environment,” she said.
Source: nationalmortgagenews.com