Rising Interest Rates Could Mean Mortgage Industry Layoffs

Though housing demand throughout Texas remains strong, the demand for home loans ended up at a three-year low, according to a survey from Fannie Mae. The mortgage giant also indicated that demand for home refinance loans fell to its lowest point since 2Q 2014. These trends, in turn, could mean mortgage industry layoffs.

One of the culprits is rising interest rates; another is tight supply and home price appreciation. The result is that financing a home is anticipated to continue increasing into 2019. Industry experts believe that mortgage companies will respond through workforce reduction. Fannie Mae Chief Economist Doug Duncan indicated that mortgage origination volumes are decreasing, while competitive pressures are on the rise.

“We expect this will prompt businesses to turn to cost-cutting as a means of managing their bottom lines, with payroll reduction likely to assume a more prominent role in future belt-tightening efforts,” Duncan said in the Fannie Mae report.

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