Following in the footsteps of other banks and mortgage companies, Citi (NYSE:C) cuts fewer than 100 positions to address slow down in housing market amid rising interest rates.
“Citi has made a small number of staffing reductions within our mortgage team due to internal streamlining of functions,” a Citigroup said in an emailed statement.
The mortgage industry, in general, has been witnessing a slump due to rising interest rates and falling origination volumes and decline in mortgage financing. According to the Mortgage Bankers Association’s seasonally adjusted index, purchase applications is down 23% Y/Y, while refinancing business is 83% lower than the same week one year ago.
The drop in demand for mortgages is impacting Citigroup’s refinancing business. Citigroup’s US retail bank originated $7.2 billion in mortgages in the first six months of the year, a 15% drop compared with a year ago.
Fed Chair Jerome Powell at the Jackson Hole symposium affirmed the fact that policymakers were committed to raising rates and sustaining a period of below-trend growth in order to combat inflation and restore price stability.
Citigroup (C) had hired tens of thousands of staff between 2018 and 2020 to handle surging mortgage originations and refinancings driven by low interest rates.
Banks and Mortgage Companies: JPMorgan Chase & Co. laid off hundreds of home-lending employees and moved hundreds more into new positions inside the bank.
Wells Fargo & Co. (NYSE:WFC) has announced another round of lay-off on Sept. 1. The banking giant plans to cut 75 jobs in Ankeny, Clive, Des Moines and West Des Moines between Sept. 28 and Oct. 25.
Redfin disclosed its plans to reduce its staff by ~6%.
On June 14, The real estate brokerage Compass announced it is cutting its staff by 10%.
Mortgage tech company, Blend announced in its Q2 conference call that they have eliminated over 400 positions or 25% of our workforce since April.
Better.com has reportedly trimmed half of its workforce — or more — since December.
Image and article originally from seekingalpha.com. Read the original article here.