‘Remember the technology sector is impressed, the banking sector also feels the impact.’
The United States (US) financial institution, JPMorgan Chase & Co, had to lay off a number of employees in the home lender division due to declining demand in the housing market.
This had to be done because there has been an increase in mortgage rates due to the Federal Reserve’s (Fed) aggressive tightening of monetary policy, 75 basis points, since 1994.
In addition, nearly 1,000 remaining employees in the division will be transferred to other divisions within the bank.
A JPMorgan spokesperson commented in the company’s official statement, a string of cyclical changes in the mortgage market then the company decided to relocate a number of affected employees to other divisions and some had to be laid off.
Even so, the company will still help the remaining affected employees find new jobs inside and outside Chase.
Overall, the Fed’s policy tightening measures last week have made 30 -year mortgage rates double from a record low in January 2021.
To make matters worse, a report by the National Association of Realtors reported U.S. home sales fell for 4 months in May to a nearly 2 -year low.
On the other hand, other mortgage lending banks such as Wells Fargo & Co. also had to lay off or reassign employees in his home loan division.
No exception, Compass Inc. and Redfin Corp. also announced plans to reduce the company’s workforce amid declining demand in the U.S. home market.
