JP Morgan (NYSE:JPM), is slashing jobs in its mortgage business as the economy slows and demand for mortgages slows, according to a report by Bloomberg.
JP Morgan is an enormous financial services firms with $4 trillion in assets and a significant home lender. The report states that JPM will cut jobs in the mortgage unit by around 1000 positions with some employees being reassigned to other services. During the first quarter of 2022, JPM reported a 34% decline in retail mortgage originations.
An unidentified JPMorgan spokesperson said the decision was a “result of cyclical changes in the mortgage market.”
“We were able to proactively move many impacted employees to new roles with the firm and are working to help the remaining affected employees find new employment within Chase and externally.”
The signs of a slowing housing market have increased following the aggressive rate hike by the Fed as it acts to stem inflation which has jumped to a 40 year high. Mortgage rates have nearly doubled in just a few months slamming the door on many home buyers – even in previously hot markets.
Earlier this month, neo-brokers Redfin and Compass announced they were slashing jobs due to declining demand.
Yesterday, Redfin Chief Economist Daryl Fairweather stated:
“Higher mortgage rates are necessary to cool down the red-hot housing market. They’re already slowing competition, but they’re also putting buyers in a tough spot. The increase in monthly payments means many house hunters now need to consider smaller homes—perhaps farther from their ideal neighborhood—or stick to renting if they’re priced out of the market altogether. And for sellers, smaller homebuyer budgets mean they can no longer expect to get top dollar for their home.”