Housing Market Braces For Rising Layoffs ‘Soon’ As Mortgage Lenders, Home Sellers Cut Thousands Of Jobs

Despite a stronger-than-expected jobs report on Friday, Pantheon Macro chief economist Ian Shepherdson says the resilience “likely will change over the next couple months,” as the impact of rising rates ripples across the economy, with rate-sensitive sectors like housing among those expected to be hardest hit.

“It’s a certainty that layoffs soon will be rising across the entire housing ecosystem,” says Shepherdson, warning the struggles will be akin to those illustrated by well-publicized tech layoffs, which hit giants Stripe and Twitter last week and could continue this week with Facebook-parent Meta.

“The housing market has cooled as interest rates scare off new buyers,” explains Andrew Challenger of career services firm Challenger, Gray & Christmas, noting housing starts and permits have both fallen as brokerage firm Redfin reports that existing home sales plummeted 35% in the year through late-October—the biggest drop since it began collecting data in 2015.

It remains vastly unclear just how many jobs could be on the line, but already a rash of firms in the housing sector have started implementing mega-sized layoffs, with home-selling platform Opendoor last week saying it was slashing about 18% of its workforce, some 550 workers, as the company navigates “​​one of the most challenging real estate markets in 40 years.”

Lenders have also been hit hard: This summer mortgage giant LoanDepot announced thousands of job cuts, and Wells Fargo is reportedly looking to some 2,000 loan officers as mortgage volume plummets 90% year over year.

“The changes we’ve recently made are the result of the broader rate environment and consistent with the response of other lenders in the industry,” a Wells Fargo spokesman told CNBC in a statement, adding the bank “regularly” adjusts staffing levels to align with market conditions.