2,100 Bank of America employees are losing their jobs. This follows 2,300 layoffs at Wells Fargo announced in August. A sagging mortgage refinancing market is getting the blame.
With mortgage rates on the rise, refinancing is no longer a good deal for millions of Americans. That means banks are losing business in an area that has been extremely important lately.
“Refinancings have been critical to the banking industry,” says Columbia Business School real estate professor Chris Mayer. “Because purchase mortgages have maintained at such a low level, most of the activity has been refinancing.”
The latest numbers from the Mortgage Bankers Association show the average rate on a 30-year fixed loan at 4.73 percent. That’s more than a full percentage point jump from just a few months ago.
Numbers like those mean a large chunk of the population won’t refinance their mortgages. Banks are losing a lot of business and warning Wall Street of a rough ride ahead in the mortgage business. And unfortunately, many bank employees are losing their jobs.
Click the audio player above to hear Marketplace’s Mark Garrison talk about this story with Morning Report host David Brancaccio.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.