According to the Bureau of Labor Statistics, unprecedented hiring of non-custodians in mortgage lending and brokerage continued last month.
Even with a slight downward revision to the September numbers, estimated employment in the industry remained incredibly high through at least October as home loan refinancing continued to rise due to low interest rates.
There were 350,100 people employed in the industry during the month, compared to 339,900 in September and 305,100 in October 2019.
The September hiring surge continued into October, when the total rose to 106,900 from 101,100 in September and 87,900 in October last year.
It remains to be seen whether this level of attitudes will be sustainable in the non-bank mortgage industry. So far, the surge in lender profits appears to outperform the cost of employment, but overall employment growth has slowed, which is reported with less lag than non-bank mortgage lenders. In addition to the housing market supply shortages and an additional fee for some refinancing starting in December, this could suggest that the extent to which origins and profits can grow may be limited.
"The November Employment Report shows a sharp slowdown in employment growth as total non-farm employment climbed to 245,000 and the unemployment rate fell to 6.7%. This is not in line with consensus estimates and still leaves a deeper hole than the worst the Great Recession, "said First Deputy American Chief Economist Odeta Kushi emailed a press release on Friday.
The increase in total employment in November is less than 638,000 in October last year and 261,000 in November last year. Unemployment fell slightly from 6.9% in October. Due to a classification error, unemployment may have been undervalued by 0.4 percentage points or less in October and November. In November last year the unemployment rate was 3.5%.
Despite the relatively higher overall unemployment rate, Kushi says it is possible that mortgage jobs will remain immune to the broader market squeeze.
"The only major sector showing immunity to the economic impact of the coronavirus is the real estate market, which has rebounded strongly in a V-shape," she said. "This is mainly due to the fact that this is a service-related recession that disproportionately hurts younger, lower-paid tenants who are less likely to be homeowners or home buyers."
Although limited housing supply, as well as the fee for some refinancing loans, could limit growth in the mortgage market, increases in housing employment could indirectly lead to origination growth.
“Jobs in residential construction initially recovered strongly from the low in April and are continuing the slow rise to pre-pandemic levels. In the latest report, residential construction jobs are up nearly 0.2% month-on-month and are only 0.7% below February levels, ”said Kushi.