JPMorgan lays off home loan workers as housing market cools
Topline
JPMorgan Chase, the nation’s largest bank, laid off hundreds of home loan workers on Wednesday, Bloomberg reported, as rising mortgage rates and rising inflation continue to cool a once-hot housing market .
JPMorgan laid off hundreds of home loan employees on Wednesday (Photo by Chris Hondros/Getty Images)
Highlights
A JPMorgan spokesperson confirmed the layoffs in a statement to Forbessaying its “staffing decision this week was the result of cyclical changes in the mortgage market”.
The company will lay off hundreds of people and reassign hundreds more, affecting more than 1,000 of its 274,948 employees worldwide, according to Bloomberg, which cites unnamed sources.
A spokesperson said Forbes the company has been able to “proactively transfer many affected employees to new roles within the company” and “is working to help the remaining affected employees find new employment within Chase and the outside”.
Key Context
The layoffs came after sales of existing homes fell 3.4% from April to May, marking the fourth straight month of declining sales, according to the National Association of Realtors. NAR chief economist Lawrence Yun said on Tuesday that home sales have cooled over the past year and are “essentially returning to levels seen in 2019” even as the median sale price of existing home topped $400,000 for the first time last month. Meanwhile, the Federal Reserve last week announced its biggest interest rate hike in nearly 30 years in a bid to fight inflation, raising rates by 75 basis points. The average 30-year fixed mortgage rate also hit its highest level since 2008 last week, more than doubling from its record low in January 2021.
To monitor
If more mortgage lenders will lay off employees in the coming weeks as the home buying market continues to slow.
Further reading
Existing home prices hit record $402,000 but sales tumble as housing market ‘painfully’ adjusts to rising rates (Forbes)
Mortgages top 6%, hitting highest level since 2008: Housing market could ‘torpedo’ US economy, expert warns (Forbes)