America

Temporary dismissal of housing market: JP Morgan cuts staff due to slowing US home sales

JPMorgan Chase and Company, the largest bank in the United States, has begun dismissing its employees as the US housing market continues to cool amid rising mortgage rates.

This decision affects more than 1,000 employees, about half of which is transferred to various departments within the bank, according to people familiar with the issue, who discussed personnel issues and asked them not to reveal their identities. Bloomberg News reported..

This move occurs when the country’s booming housing market turns in the midst of record high inflation, driving the Federal Reserve to take the following positive moves: Benchmark borrowing rate increased by 0.75% last week. It was the largest single rate hike since 1994.

Why does JP Morgan fire people? “This week’s staffing decision was the result of cyclical changes in the mortgage market,” a JP Morgan spokeswoman said in a statement Wednesday. Bloomberg report. “We are actively able to move many affected employees to new roles within the company and are working to help the rest of the affected employees find new jobs inside and outside the chase. “

Wells Fargo, the largest mortgage company in the United States, has also dismissed and relocated employees in the mortgage sector, according to people familiar with the company who asked them to discuss personal information and not reveal their identities. Bloomberg reported..

Other major real estate companies including Redfin and Compass also recently announced layoffs When US home sales fall and pessimism begins to permeate the market. Redfin publication It reduces the workforce by 8%, which is equivalent to employment of about 470 people. According to the compass, we plan to reduce staff by about 10%. Submission to regulatory agencies..

Why are prices still high when the housing market is chilling? For the fourth straight month this year, pre-owned home sales in May fell 3.4% from April and 8.6% from May last year. Data posted by the National Association of Real Estate Agents on tuesday.

Lawrence Yun, Chief Economist of the National Association of Real Estate Agents, said:

But prices are still high. The median existing home sales price across the country reached $ 407,600 in May, surpassing $ 400,000 for the first time. According to the National Association of Real Estate Agents, this is an increase of 14.8% over a year ago.

“Given the challenges of affordable housing due to the surge in mortgage rates this year, sales will continue to decline in the coming months,” Yun predicted.

“Nevertheless, reasonably priced homes are selling rapidly, and inventory levels still need to rise significantly in order to curb home price increases and provide homebuyers with more options.

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https://www.deseret.com/utah/2022/6/23/23180248/us-housing-market-jp-morgan-jpmorgan-chase-layoffs-hundreds-cyclical-changes-mortgage-rate Temporary dismissal of housing market: JP Morgan cuts staff due to slowing US home sales

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