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Great Resignation Wave Threatens The Mortgage Industry

Nov 05, 2021
'Dear Boss, I Quit' Pic
Staff Writer

Soon enough, the resignation wave that’s been building since last Spring will catch up with the mortgage industry, potentially washing out smaller companies and increasing competition amongst larger players.

KEY TAKEAWAYS
  • Nearly 1 million American workers resigned in June before jumping up to 4 million in July, and reaching a whopping 4.3 million in August — the highest number ever recorded by BLS.
  • Employees between the ages of 30 and 45 have had the greatest increase in resignation rates, increasing more than 20% from 2020 to 2021.
  • 54% of employees feel overworked and 39% feel exhausted.
  • Once refinances whittle down and purchases decline, big industry players like Rocket Pro and UWM will fight for market share. 

The stability of the real estate market depends heavily on the health of our job market. Without jobs, people can’t build, sell, or buy homes, spelling disaster for the mortgage and housing industries. Soon enough, though, the resignation wave that’s been building since last Spring will catch up with the mortgage industry, potentially washing out smaller companies and increasing competition amongst larger players.

According to the U.S. Bureau of Labor Statistics (BLS), the amount of resignations among American workers has been increasing since May 2021, with nearly 1 million resignations in June before jumping up to 4 million in July, and reaching a whopping 4.3 million in August — the highest number ever recorded by the BLS Job Openings and Labor Turnover Survey series. Job Openings and Labor Turnover data for September 2021 are scheduled to be released November 12, 2021. 

In October 2021, the unemployment rate edged down slightly by 0.2 percentage points to 4.6%, according to the U.S. Bureau of Labor Statistics. The total number of unemployed persons in the U.S. is slowly whittling down, hitting 7.4 million this month. Still, the U.S. has 5 million fewer jobs than it did pre-pandemic as of September.

Although turnover is typically highest among the younger generations, recent data shows that employees between the ages of 30 and 45 have had the greatest increase in resignation rates, increasing more than 20% from 2020 to 2021. Meanwhile, resignations declined among 20 to 25-year-olds, likely due to their financial uncertainty and the low number of entry-level jobs. Resignation rates also fell for the 60 to 70-year-old age group, suggesting these figures are not the result of early retirement. 

There are few factors contributing to this wave of resignations and why the increase is happening among mid-level employees. Many economists and experts speculate that the shift to remote work has made it harder for employers to recruit new talent, especially since they won’t be in the office for training. This gave greater demand to mid-level employees with greater leverage when applying for new positions. Due to the pandemic, these employees may have held back from quitting earlier and now they’re in a mass exodus. 

A more convincing argument, though, is that workers are feeling burned out from ratcheting up productivity over the past year and a half. A Microsoft survey on the workforce, self-assessed productivity remained the same or increased for a majority (82%) of employees, but at a human cost. 

One in five survey respondents said their employer didn’t care about their work life balance. The survey of more than 300,000 global workers found that 54% of employees feel overworked and 39% feel exhausted. Perhaps, this period should be called “The Great Burnout” if that’s what's driving most people’s decision to resign. 

 A sluggish job market is not conducive to a healthy real estate market, and mortgage professionals are already worried about the effect of rising interest rates on the purchase market. Once refinances whittle down and purchases decline, smaller players will either consolidate or wash out while the big players fight for dominant market share. 

Yesterday, Rocket Pro, one the leading mortgage lenders in the nation, came out with a strong third quarter earnings report, which should help bolster their confidence for the upcoming months. “As we look ahead to the next year,” said CEO Jay Farner, “we expect our Rocket Mortgage business to achieve continued market share growth, exceeding 10% share in a purchase-heavy market.” 

In 2019, Rocket Pro’s mortgage originations accounted for roughly 6.5% of the market, but that figure grew to 8.5% in 2020. Now the company has even greater expectations for taking over the market with their diverse set of products. “We are well on pace to break 2020's strong origination record of $320 billion and end the year with 9.5% market share,” Farner continued. “As we look towards 2022, we will continue to invest in the rapid growth of our platform, delivering a unified client experience across mortgage, real estate, auto, personal loans and solar.” 

United Wholesale Mortgage (UWM)  Rocket Pro’s main competitor plans on announcing their third quarter earnings during a conference call on Tuesday, November 9, 2021 at 9:00 AM. Those who are waiting for the announcement can expect high goals for their market share, keeping them in the game with Rocket Pro.

 

About the author
Staff Writer
Katie Jensen is a staff writer at NMP.
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