Nonbank mortgage employment continued to drop in October, according to the Bureau of Labor Statistics.
Nondepository mortgage lenders and brokers cut 1,500 workers from their payrolls in October, bringing total employment in the sector to 340,600 from 342,100 in September, the Bureau of Labor Statistics reported Friday.
The drop in hiring by independent mortgage bankers comes as economists at the Mortgage Bankers Association expect purchase mortgage originations will drop from $320 billion in the third quarter to $262 billion in the fourth quarter of this year.
Meanwhile, refinancings should remain steady at around $152 billion for each of the last two quarters of the year.
Overall, one-to-four family mortgage originations will drop to $415 billion in the fourth quarter of 2017 from $471 in the prior quarter, according to the MBA’s forecast.
However, economists at Wells Fargo Securities note that the gross domestic product has strengthened to 3%, consumer confidence has risen to a 17-year high, coupled with an improving labor market, job security and income growth. These trends should bring more first-time home buyers into the market, according to a Nov. 6 Wells Fargo Securities Housing Chartbook.
“There are ample reasons to be optimistic about housing in 2018,” according to WFS Senior Economist Mark Vitner and Hank Carmichael, an economic analyst. “The leading edge of the millennial generation is reaching their late 30s and increasingly forming families and searching for a first home.”
WFS is also forecasting that single-family starts will jump from 840,000 in 2017 to 920,000 in the next year.
New-home sales rose 6.2% to an annual sales pace of 685,000 in October, “a new high for the expansion,” according to economists at JPMorgan Chase Bank.
The BLS industry-specific figures lag one month from its overall employment data. Total nonfarm employment increased by 228,000 in November, compared to a revised 244,000 in October, the BLS report said. The unemployment rate remained at 4.1% in November.