Employment Drops as Rates Rise

The start of 2006 showed a cooling in the mortgage and real estate industry, with borrowers issuing a sigh of relief. But the trend has caused some discomfort in the market – a cut back in the amount of jobs available in the industry. Employment in the mortgage industry peaked in middle 2003, and has dropped by 10 percent since then. Most of the job losses were seen by smaller mortgage companies as a result of the slowing of refinances toward the end of 2005. When the business slowed, the smaller companies didn’t have the other resources large lenders have to fall back on.

During the boom, more people entered the mortgage field to capitalize on the money that was being made. As the market cooled, people returned to previous employment areas or left to open their own companies. Analyst think that the 10 percent decrease is just the beginning, as larger lenders start outsourcing or utilizing their current personnel in multiple functions. Other small companies that opened in response to the slump may close down due to lack of alternate funds, causing an even larger drop in employment.