The housing market's rollercoaster ride has once again brought employment in mortgage lending and brokerage to a standstill. The latest data reveals a stark contrast between the two housing bubbles, with nonbank mortgage lenders shedding 40% of their jobs and loan brokers losing 38%. This dramatic employment plunge mirrors the housing bust, as mortgage lenders and brokers react to the plummeting demand in the housing market. But what makes this situation particularly fascinating is the automation and digitization of mortgage lending, which has reduced the need for human labor. This trend has been ongoing for two decades, and it's interesting to consider the implications for the future of employment in this sector. From my perspective, the housing market's volatility and the increasing automation of mortgage lending raise a deeper question: how will the job market adapt to these changes? What makes this situation even more intriguing is the contrast between the two housing bubbles. While Housing Bubble 2 was characterized by a home-price explosion fueled by the Fed's reckless monetary policies, Housing Bubble 1 saw an even bigger employment bubble. This raises a question: what caused the larger employment bubble in the first place? One thing that immediately stands out is the role of the Fed's policies in both bubbles. In my opinion, the Fed's actions have had a significant impact on the housing market and employment in mortgage lending. The Fed's purchases of trillions of dollars in securities, including mortgage-backed securities, repressed mortgage rates below 3%, despite surging inflation. This created a false sense of security and fueled the housing bubble. But what many people don't realize is that the automation and digitization of mortgage lending have already begun to change the job market. The jobs at nonbank mortgage lenders are not the only ones affected. Mortgage-related employment at banks has also been impacted, with mass layoffs announced at the mortgage divisions of major banks. This trend is likely to continue as the housing market adjusts to the changing landscape. In conclusion, the housing market's rollercoaster ride has brought employment in mortgage lending and brokerage to a standstill. The automation and digitization of mortgage lending have reduced the need for human labor, and the job market is likely to adapt to these changes. From my perspective, the Fed's policies have played a significant role in both housing bubbles, and the job market is likely to continue to evolve as the housing market adjusts to the changing landscape.
