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Rocket Mortgage to trim 8% of workforce as home-loan market shrinks
- cammikebrown 4y agoSeems like the bubble burst is going to be more sudden than we thought. 30 year mortgages are suddenly at nearly 5.5-6%, listings are sitting on the market for longer, and multiple cities are cracking down on Airbnb.
- alexb_ 4y ago"Cracking down on Airbnb"... you say this as if Airbnb is a horrible thing or something LOL
- Raed667 4y agoAirbnb is a horrible thing if you (like me) live in a tourist city and making rent inaccessible to the local residents
- dominotw 4y agowhy do you live there though. Can't you ask your employer to match the deficit.
- throw8383833jj 4y agoemployers could not care less about your housing problems because employers have greater bargaining power than workers. places like CA think they can control where people live by depriving people of housing but it's not true. people just become ever more desperate, paying more and more for shelter. It's employers who decide where people are. this is because we've created a world where people can't live without money. so he who controls wages, controls where people live.
- broken8ball 4y agoIt’s my understanding that Airbnb is pretty bad when it comes to gentrification and driving city natives out of affordable housing.
- woodruffw 4y agoI don’t know about other places, but Airbnb has been a mixed bag for NYC: I’ve seen it used to keep housing stock off the market, to dodge the obligations associated with keeping a property livable, and to essentially run entire illegal hotel businesses without attracting regulatory (including safety) scrutiny.
- baisq 4y ago
- plazmatic 4y ago
- Balero 4y agoSo it's ok if someone moves next to you, plays music all hours, leaves rubbish everywhere, and are generally annoying to live next to. And then the next week a whole new group of people move in forgetting any requests you made, but act the same way because they are specifically there for a fun weekend. Also this stops you getting to know your neighbors and form a community and friends that live around you. Any improvements you make to the local area and street have the owner uninterested or pushing back because they do not want to invest in the area.
- bobthepanda 4y agoAlso, tourists are the absolute worst to have as neighbors. Warnings for noise complaints and rubbish don't really work if the person is just going to be gone by the time a third strike happens.
- raverbashing 4y agoAirBnb in NYC is also a fertile ground for scams
- crate_barre 4y agoExplain. I thought finding a high rated host is enough?
- throwaway578309 4y agoIt is if you live next to a landlord that houses loud guests. Is this even a question?
- justsomeguy123 4y agoAirBNB, like Uber, lives on sucking externalities. They are the modern Oil that sometimes spill and kill some ecosystem, but because the ecosystem is far away nobody cares. Like a pimp, AirBNB is the helpfull middleman for the desperate or the sociopaths. So, yes, at it's core AirBNB is horrible.
- raesene9 4y agoAirBnB (and similar) has been really bad for the property market in the Scottish Highlands. Lots of people buying up scarce housing stock to use for holiday lets, means that locals who work in the area (where a lot of local employers can't pay stellar rates) can't afford to buy. Combine that with the fact that these areas are often in National Parks which have restrictions on new-builds and you'll inevitably reduce the amount of people actually living in the area.
- jimbob45 4y agoThink about a hypothetical city where 100% of the properties are AirBNBs. There will be no source of employees for any local businesses because there are no long-term residents. There is no vested interest to improve the city via taxes and volunteerism, because no one truly lives there. No one will move to that city because the property rates are so absurdly inflated thanks to AirBNB rates. It’s an absurd example but cities frequently see these effects when they let AirBNB and rental properties run wild.
- dominotw 4y agothis is basically all mountain towns now.
- itsmejerry 4y agoOther than perhaps zoning restrictions, how does this differ from traditional hotels/motels in extreme tourist areas, like Niagara Falls. If people don't want to live permanently in a city for whatever reason, of course the city will suffer.
- jimbob45 4y agoHotels/motels are dense enough that they don't take usable land away from residential housing while still allowing for short-term residents to enjoy the city. However, AirBNBs and rental houses suck away the usable land such that you begin to meaningfully remove potential long-term residents from the city. The flipside of this, of course, would be apartments/duplexes, which would add more long-term residents than single-family zoning would allow, even with the problem of AirBNB proliferation.
- globalise83 4y agoMixed bag if you live next door to one. We had one guy wake us up early in the morning on a Sunday because he locked himself out. Another time we were gifted half a cooked spiced lamb from a Saudi Arabian family.
- theferalrobot 4y agoI’m seeing 5.0% most places (see ally bank). Still higher than its been but not pushing 6% by any stretch.
- broken8ball 4y agoAllegedly 6 more rate hikes from The Fed this year too, so this could just be the beginning.
- anm89 4y agoI personally do not believe they have a shot in hell at making it through 6.I think there is going to be some serious chaos in markets well before then. We haven't seen chaos in markets without immediate fed support for decades. It's going to get bad IMO. It will be surprising if Powell doesn't do a second pivot and go Dovish well before 6. Obviously I'm not a fortune teller and many people disagree.
- paxys 4y agoAnd it is still relatively easy to get ~4-4.25% with a little bit of negotiating.
- crysin 4y agoBy negotiating do you mean taking points? I can’t imagine many lenders are willing to go below prime for a 30 year conforming loan.
- s1artibartfast 4y agoI'm in escrow with less than 4% today w no points. Took some negotiating
- ab_testing 4y agoHow to negotiate rates? What do you usually tell them in the phone ?
- elevaet 4y agoIn Canada rates are creeping up from really low, often under 2% still.
- jbay808 4y agoThat's probably because Canadian mortgages are essentially all adjustable rate.
- refurb 4y agoAnd a median sale price that has hit ~$800,000, which is double the US.
- elevaet 4y agoIt's nuts. Canada has a lot of good things going for it, but housing affordability is at a crisis point.
- refurb 4y agoIt is. You can just look at the US and Canada over the same time period to see how out of wack Canada is. Canada is basically the US minus the 2008 crash. It's just price inflations non-stop for 20 plus years.
- onlyrealcuzzo 4y agoIsn't it 40 years?? My understanding is prices crashed hard in the 70s, there was a slight decline in 1990 and 2008, and other than that they've been going up 5-10% per year.
- refurb 4y agoThe last big crash was 1990 in Toronto. Price dropped and didn't recover until the early 2000's. https://urbaneer.com/blog/when-dreams-of-domesticity-became-nightmares-steve-fudge-urbaneer-bosley-recounts-the-1989-toronto-housing-market-crash https://urbaneer.com/blog/when-dreams-of-domesticity-became-...
- hans1729 4y agoI mean, it's not really a burst, we're just hearing the hissing noise of the obvious leak. The true demand from people with the intend to actually live in the estates has been constantly decreasing since around 2000; the real salarys dropped since then, so did the buying power. The only reasons people found buyers at x3-x10 (!) prices were a) that there is a class of people wealthy enough to still afford the purchase, even at those completely-out-of-touch prices, and b) that people were given loans they should either never have gotten (2008) or that they shouldn't have asked for (because it's dumb to buy estates where the price is set by people and institutions that have n times your own income/net worth) When 90 (?) percent of people simply lack the buying power to participate in the real estate market, but the other 10% happily sell each other estates, that's not a bubble, the real estate market just stopped interfacing with the vast majority of the population.
- cdiddy2 4y agoIts really not that bad in the US especially compared to its peers https://awealthofcommonsense.com/wp-content/uploads/2021/09/Screenshot-2021-09-07-115719.png https://awealthofcommonsense.com/wp-content/uploads/2021/09/...
- crate_barre 4y agoHousing legislation is something that few politicians have been talking about in the last decade. We have spent a lot more time talking about healthcare, and student debt, but not the number one financial factor which is housing. You really can’t leave it alone with legislation every 20 something years, you sort of have to keep evaluating and reevaluating it. Otherwise while we let the current systems in place fester, what you get is side effects that we simply can’t address until decades later (e.g Canada banning foreign buyers, ok great, the damage has already been done). Many of the investor class had the first mover advantage where they simply bought a house before everyone else and can now leverage those gains into more investment/rental income property. Couple that with foreign investment. Couple that with home equity and margin loans. Couple that with the private sector collecting houses. Couple that with mortgage fraud where people don’t pay investor taxes and continuously buy homes as a first time home owner. Couple that with with all kinds of things. I know a home owner that owns multiple homes, stopped paying taxes on one and had a tax lien discharge. They go on to sell that other home at profit and pay off the IRS. They never took the hit on their first home in any way. Multiple ownership is a problem, period. We finally end up to where we are today and the only powerful entity that modulates this is the Fed, but not a single politician is taking up the battle over the fact that the multiple home ownership is killing our society at the moment.
- apexalpha 4y agoThat's really high compared to Europe! I just bought a new house with 2% on the interest-only part and 1.6% on the annuity part! In the month after rates grew by about 0.5% though. Seems like we hit the bottom and are climbing very slowly.
- oliwarner 4y agoWhole-term-fixed rates are pretty uncommon in Europe. Fixes of 2, 5 sometimes 10 years are products most providers offer, but as the term increases, the rate shoots up, to offset rate uncertainty. My question is: why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty? Remortgaging every couple of years takes a bit of time, and shopping around, but is much cheaper.
- s1artibartfast 4y ago>why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty Because you are leveraged to the gills and a rate hike could lose you your entire principal.
- runeks 4y ago> My question is: why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty? To fix your monthly payment for the next 30 years. Furthermore, with a fixed rate mortgage you can benefit from interest rate volatility since you can always buy back the debt at par. In practice this means you can: 1. Take out a fixed rate loan for $n at x% 2. If the rate doubles (to 2x%) you can refinance and you now only owe half ($n/2) 3. If the rate falls to x% again you can refinance again and now you owe the original amount ($n/2) at the original rate (x%) This ignores the cost of refinancing the loan, so you’ll be paying some fixed sum for that (which is lost), but if rates moves sufficiently this is a huge benefit that you don’t get with a variable rate mortgage loan. * This is based on how the Danish Realkredit mortgage works. I’m not certain, but I believe fixed rate mortgages work the same way in other countries.
- shawabawa3 4y agoCan you explain point 2? Why do you refinance if rates go up? Surely the point is that if rates go up you've locked in a better rate How does half your debt disappear if rates go up?
- ilammy 4y ago
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- taf2 4y agoIt seems like interest rates need to get to maybe 9% to bring down inflation… see: https://www.federalreservehistory.org/essays/recession-of-1981-82 https://www.federalreservehistory.org/essays/recession-of-19...
- mensetmanusman 4y agoThis is also what the pushback against asset price inflation looks like.
- deleted 4y ago[deleted]
- davio 4y agoRefinance applications were down 70% compared to year ago. Combined with low home inventory, the mortgage industry looks pretty grim. I'm expecting rates to reverse at some point. Mortgage companies will either need to compete to get some business or just give up.
- s1artibartfast 4y agoLast years rates were a historic low, lower than the last 40 years at least. How do refinances compare to 3, 5, or 10 years ago
- gowld 4y agoWhich bubble? A refi bubble? Maybe (but that's more of a fad than a bubble) Real estate bubble? Sort of. Housing affordability bubble? Not really. Interest rates move profits from home sellers to banks. Housing affordability is driven by supply+demand. Housing prices are driven by" Affordability minus Interest Rates: Low Rates + High Price = Monthly Payment = High Rates + Lower Price
- xphilter 4y agoSure, but there’s still no supply of homes. There are presently 2 houses for sale in my neighborhood of about ~750 homes. I don’t have historical data, but 0.002% seems very low for spring.
- tibbar 4y agoI don’t have a good way to reconcile the current hot job market with seemingly increasing reports of mass layoffs, but one wonders if the graph will change directions decisively at some point soon.
- Rebelgecko 4y agoI think the mortgage industry is a bit different in that their workload is so closely correlated with interest rates. People were refinancing like crazy 1-2 years ago, but it's slowed down as rates have gone up.
- paxys 4y agoEngineering roles aren't seeing the worst of it (yet).
- onion2k 4y agoI don’t have a good way to reconcile the current hot job market... The world is bigger than tech.
- jbay808 4y agoIt's not only tech! The labour market is very tight across North America in general.
- xbmcuser 4y agoLabour market is tight because after covid people are not willing to work at many jobs at the peanuts they were paid for before nor are they willing to change the work life balance they would need to sacrifice for these jobs.
- hamter 4y agothere's that plus i think a bunch of boomers (like my parents) took it as a sign to retire.
- jeffbee 4y agoMakes sense. Nobody needs to refinance at these rates.
- brundolf 4y agoIs this because individuals aren't as interested in buying houses, or because investors are buying more of them (and don't need financing)?
- jsiaajdsdaa 4y agoIt's because interest rates are high (5%) and house prices are also high (millions). Less people are buying right now compared to this time last year which was a genuine frenzy at 2.8% rates.
- anm89 4y agoIt's because the refi boom is done. Every time rates hit a new cycle low, people rush to refi and lock in that rate. On the way out of one of those cycles everyone's already locked into low rates. There's nothing left to refi. The last 3 years have been a gold rush for the refi business. That and we are probably in a general housing slowdown off the highs which is related to the first point anyway via rates rising.
- bombcar 4y agoThis is exactly it - house purchases could stay the same or even go up but once rates start climbing, refis almost entirely disappear, so the total number of loans originated slows way down. Something like 25% of loan holders refinanced during Covid.
- refurb 4y agoWhat kind of an investor wouldn't use leverage when rates are this low?!?
- refurb 4y agoThis is actually a good thing. House cycles exist and it's better to have smaller, more frequent ones than massive ones like 2008. Canada never had a 2008 housing crash. Housing has been on a tear since the early 2000's and the average sale price of a home (nationally) is 2x that of the US despite lower salaries, higher taxes and a lack of 30-year fixed rates. That is a bubble. My opinion is the US market is hot, but not a bubble. It could turn into one, but if this is a real correction, the fear of a bubble is much less.
- nikanj 4y agoIf you plot Canadian housing supply vs Canadian city population growth, you get another perspective. Houses are incredibly expensive, because there aren't enough of them
- _v7gu 4y agoNo, no. It's the foreigners' fault. Hypocrisy and xenophobia will fix everything without having to create actually livable cities where people aren't slaves to cars.
- hamter 4y agodon't worry we're happy to do both transit and xenophobia in canada (unless the next administration cancels the transit plans) (they will)
- ant6n 4y agoIn many places, Canada also does celebrating diversity and living car-culture very well.
- JohnWhigham 4y agoYou're living a very naive reality if you don't think foreign investors buying properties that sit vacant 11 months out of the year contributes to the housing problem.
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- bspear 4y agoWow big week of lay-offs between this and Robinhood
- notacoward 4y agoThese are nothing. In 1993 IBM cut 60K jobs and Sears cut 50K. In 2008-2009 Citigroup cut 50K and GM cut 47K. Imagine the effect those layoffs had on cities where they were concentrated. If you want to talk percentages, small to medium companies lose 50-100% all the time. Even in tech we've had bigger job contractions. I was working through the early 90s when companies like Prime and Data General went under, DEC was forced into a merge with Compaq, etc. Then, of course, the dot-com boom and subsequent bust. 8% of 26K is a big deal to the people and areas directly affected, of course, but in the larger scheme of things it's business as usual.
- deleted 4y ago[deleted]
- jetti 4y agoI imagine that Rocket increased their workforce by more than 8% between spring of 2020 and now. I work for a mortgage company and layoffs have happened multiple times this year. With rates so low for almost two years the volume increased significantly. In order to deal with that volume the company most certainly had to hire many people and quick. The market conditions can't support keeping those individuals (or at least the number of positions that were added) during the pandemic. People who work the operations jobs (who are behind the scenes helping the loan officer close loans) know the market is cyclical and know that layoffs are a part of the business.
- gowld 4y agoH&R Block must be the harshest cycle, but also most predictable.
- jamestimmins 4y agoI believe those jobs are seasonal
- effingwewt 4y agoThey have downsized dramatically as well. They used to have permanent offices with seasonal satellites popping up. They have several-weeks' long training courses and began well ahead of tax season. Now, they are a complete shitshow. I had an unusually complex return and decided to go with them. Big mistake. While waiting (I had an appointment but that mattered not, I was waiting pver 1.5 hours). My wait came to an end as I watched a kid, his wife and new daughter ask some questions no one knew how to answer. His question was why he owed taxes. I, from my chair, knew the answer- he hadn't had anything deducted from his substantial unemployment and thus owed on those as he would have a regular job. No one at this location, including the 'manager' knew or could find out this information. I watched as they slowly went up the ladder asking while trying not to freak out, and as the poor young couple were in hysetics. I just left after seeing all of this. They are reading the same or worse prompts than any free file service and are charging hundreds to thousands of dollars for the privilege and the 'tax experts' are anything but.
- JetAlone 4y agoBuying a home mortgage is signing yourself over to a lifetime of servitude and uncertainty if you lose your income stream. Buy a property out of pocket to live in and make the most of a DIY life at a fraction of the cost and an odd stress differential, or just keep renting and be agile enough to roll with the punches.
- londons_explore 4y agoCompare each strategy for each decade over the past 100 years... By a substantial margin, having a large home mortgage leaves you in a better financial position the vast majority of the decades, even if you lose your job and are forced to sell mid decade.
- deleted 4y ago[deleted]
- kortilla 4y agoGetting a mortgage is the easiest way to build wealth through government subsidized leverage (mortgage interest deduction).
- JetAlone 4y agoThere are 3 good replies to this one giving a decent analysis for why I might want to reconsider my position. It's hard to pick which one to answer to. Would you say that mortgage is probably driven down 8% because just can't afford the down payment anymore, or people like me who seem to have an irrational aversion to it?
- ilikehurdles 4y agoIs 8% referring to Rocket Mortgage layoffs? Over the last two or so years, mortgage rates hit historic lows, which meant the demand for cheap mortgages increased significantly, both from people wanting to enter the market and those refinancing. Consider that the $500k mortgage that would have cost $2300/mo in 2019 suddenly costs like $1600/mo in 2021. Absolutely I jumped on that train, as many others did. Lenders were overwhelmed and had to hire a lot to meet this demand. If you missed that window, well rates are above what they were pre-pandemic, looking back at least a decade, so refinancing for lower payments no longer makes sense for most borrowers. People still are buying homes, but high prices and that disappeared “once-in-a-lifetime deal” are going to suppress demand.
- dodgerdan 4y agoRocket Mortgage has a pretty modern stack, and they make good use of third party API’s to aid their processing. There’s an entire fintech ecosystem that are providers for mortgage providers like Rocket Mortgage that could be impacted if this turns into a trend.
- bluedino 4y agoThey are also 'it' when it comes to Detroit for information technology, unless you count Compuware.
- acjohnson55 4y agoThat ecosystem is already being impacted. Blend is one of the more cutting edge service providers and their stock has been in freefall since IPO in July last year. I believe they bill on a per-loan basis, so they rise and fall with the mortgage industry. https://finance.yahoo.com/quote/BLND/ https://finance.yahoo.com/quote/BLND/
- gigatexal 4y agoFor what it’s worth I used them to refi my house before the rates rose. The banker I got was amazing. She handled everything beautifully. The only thing they weren’t set up to handle was notarizing my loan while I was overseas. But we figured that out.
- doctoboggan 4y agoMy wife and I will be moving to Chicago soon and we intend on buying a house when we get there. How screwed are we by the current housing situation and interest rates?
- onlyrealcuzzo 4y agoHow soon? If trends continue, prices will start falling. You might be able to offer under asking, too. I bought 15% under asking in October of last year. Chicago didn't really go crazy like Phoenix or Palm Springs...
- bitexploder 4y agoMost of Denver region had been hot as well.
- onlyrealcuzzo 4y agoBasically everywhere beside Chicago and NYC went up >10%.
- bitexploder 4y agoWe sold a house for 2x what we paid for it in a desirable suburb. Bought in 18’, sold 22’.
- Sohcahtoa82 4y agoI've heard Denver is extremely popular because you have all the amenities of a big city (They even have a Six Flags!), yet is right next to beautiful mountains and nature. Some parts even still have a small town feel. Of course, I've also heard that a significant fraction of those moving in are single men, to the point where the city has gotten the nickname "Menver".
- onlyrealcuzzo 4y agoAside from Six Flags, how is this different from the west of the US?
- sys_64738 4y agoThese companies are not viable so it’s inevitable they collapse and people working there need to know such reality.
- glook 4y agoI love how RM is working with the people they are laying off instead of just showing them the door.
- gadflyinyoureye 4y agoI use to be a shareholder of Rocket. Then I tried to get a mortgage with them. I'm self-employed. I make about 200k/year. I had 0 debt (I paid off my house the prior year). I had 20% for up to 350k. I had an 812 credit score. When I applied they asked for my P&R statements for 2 years. The current year showed a $400 deficit (which was due to charitable giving). They said that I was losing money.Therefore I was too great of a risk. I explained to them why the numbers were $400 lowers. I told them that I already had another $20k in receivables. I told them my present house was on the market. All to no avail. I was too great of a risk. It was at this point that I knew they had little idea how to work in the industry. If they turned me down, they were turning other stable individuals down. I promptly sold my shares and moved on. The realtor of the condo I eventually purchased recommended a broker. They looked at the same info and laughed at Rocket. The new broker gladly took the loan.
- afavour 4y agoIt’s not rare for large volume companies like this to fail on edge cases. I’m sure they have an algorithm to calculate rates and risk and there was little anyone could do to change the output. I imagine it wasn’t designed with the self employed as a high priority. I’m not convinced any of that means they are destined to fail.
- gadflyinyoureye 4y agoMy issue is that they have apparently no wiggle room or advance underwriters for the loan. They have a lot of employees that don't do data entry (because the process does that for you), that don't really think, that do take up money to be paid to be the voice on the other side of the phone. Given this, they could probably reduce staffing by another 10%. As times get tougher, the edge cases will probably become a lucrative section of market. Rocket's been troublesome before. I doubt they have the capacity to pivot (given, again, their apparent lack of skilled brokers/underwriters).
- sokoloff 4y agoExactly. If I had a choice to invest at arms-length at a company who had good underwriting standards but loaned only based on liquid assets and W-2 income or in a company who very carefully underwrote loans by looking in careful detail at every applicants’ unique situation, I’m more inclined to invest in the former.
- throwawaymanbot 4y ago
- redshirtrob 4y agoHas anyone actually used Rocket? Every time I (or a friend) have looked at them they have higher closing costs and wanted multiple points to close the mortgage. I was able to do way, way better by going with a local bank, as did my friends. The only thing I can figure is they are better for folks with "good" (not "excellent") credit and can maybe close the loan faster.
- chad_c 4y agoI refinanced with them 2 years ago; they beat my local credit union and several banks at the time. Closing costs were competitive and extremely easy to schedule -- they sent an attorney to my home.
- deleted 4y ago[deleted]
- coredog64 4y agoSomething to note about your local bank/CU. They might originate the loan, but as sure as water is wet they’re going to sell it to someone else for service. If you have a good working relationship that you can used for good terms, then go for it. But don’t go with a local bank because you think you’ll continue to work with them.
- jjav 4y ago> Something to note about your local bank/CU. Credit Unions tend to be different (at least the 3 I'm a member of, maybe this is not universal) in keeping loans in-house. The banks will indeed most likely sell off the loan as soon as it's done. Not that it matters either way.
- bombcar 4y agoMy credit onion sells all loans longer than 10 years - but they keep servicing all the loans normally. Some places sell off the loan and the servicing, that's more annoying.
- MarketingJason 4y agoJust closed financing on a home. Rocket had a comparable rate but the real no-go for us was their very-limited rate-lock option. With interest rate trends what they are right now, we really needed a 200 day + rate lock with a float-down in case things changed. Other lenders (builder, ownup options, local banks) offered those and the option to buy points and apply them if we were able to float down. Rocket seemed very slow to adjust to the market forces with competitive options.
- ab_testing 4y agoCould you tell me which other lenders are offering 200 day + lock. With interest rates changing so fast, I get a hard time with lenders letting to lock rates even for 60 days.
- adoxyz 4y agoSame. I think the days of 2+ month locks are over. I've talked to half a dozen lenders since the new year and the longest lock they'd give without massive upfront fees was 60 days.
- iskander 4y agoI got a 3 month lock from Chase this past October but it might be that things have changed since then.
- pempem 4y agoGot 90 days from NASB - worth checking out.
- pc86 4y agoWe got a 90 day from Chase in February for nothing, all we had to do was ask for 90 instead of the 60 they wanted to give us, and after about 10 seconds of typing he said that was fine. I think we're a far cry away from "the days of 60+ day rate locks are over"
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- esotericimpl 4y ago
- Kharvok 4y agoRocket, like other mortgage firms staffed up the last 3 years on processing roles. Those are the first positions you're seeing let go with refinance volume falling off a cliff due to rising rates. Also Rocket recently shifted their technology strategy to build fewer point solutions in house where there was an adequate market solution available, focusing more on customer facing technology to build in house.
- woeirua 4y agoI won't feel one ounce of pity for the "investors" who lose their shirts when this bubble finally pops. We should regulate investors almost entirely out of housing. Yes, there is still a need for people with lots of capital to go in and repair dilapidated homes. But we don't need people hoarding homes and renting them out as AirBnbs.
- 1270018080 4y agoIs it a bubble? Where is the irrational exuberance? Lots of people need homes, there aren't enough, prices go up. And investors hoarding equity by forcing people to rent have a captive audience. Both of those aren't really tulip/crypto hysteria. It's just a shitty situation. I would love to see investors get burned too, but I don't think there's anything to pop. We're just a decade behind Canada.
- llanowarelves 4y agoPeople are FOMO'ing into buying sight-unseen houses the same day they get listed because they think it will continue doing 20-30% year-over-year with no significant pullback in the near future. Or same FOMO on the interest (mortgage) rate. That's not healthy
- x86_64Ubuntu 4y agoI see your point, but I look at the houses going up all around me and their prices, and I wonder where folks are getting this money from. I know what I do for a living and how well it pays, but people who make less than half of my salary are buying homes that are twice as expensive. Also, talking to realtors they mention that homes are sometimes sold before they hit sites like Zillow and such. Sight-unseen, waived inspections, $20K over asking. This can't be sustainable.
- throwaheyy 4y agoIt’s more than just salary. Take an elder millennial who has been working in bigtechco for 10 years or so. The RSUs they collected in their early years could be worth >10x today. Same with crypto over an even shorter term.
- lkxijlewlf 4y agoThey're not needed, right? Investors buying a larger share of homes, so you wouldn't need as many mortgage brokers, right? Also, some developers are simply building homes to go straight to rental property. They wouldn't need Rocket mortgage to be involved. I don't think this is a sign of a bubble bursting but more of a sign that unless you currently own and can hang onto it, you'll be a renter soon no matter your status.
- acjohnson55 4y agoI'm kinda surprised to see so much commentary on this. A lot of folks on here deeply misunderstand this industry, which is understandable, but there's a lot of very strident and incorrect opinion. Simply put, one of the biggest mortgage booms in history just came to an end. Rates were at all-time lows. That meant an unbelievable boom in demand for mortgage refis. Then when the Fed started taking inflation seriously, mortgage rates (which tend to track 2-3% above 10-year treasury yields) skyrocketed to 10-year highs. This means that very few people are in a position to benefit from a refi, and that business is pretty much dried up. The refi business is the specialty of Rocket Mortgage and other online lenders. There is tremendous demand for housing right now, due to millenials being homebuying age and housing preferences changing with the pandemic. However, supply is tightly constrained. Boomers are aging in-place, home builders aren't completing homes due to building supply and labor disruption, investors are buying properties (smaller effect than people claim), and sellers don't want to sell without a home to buy. So for-sale inventory is at all time lows. This means less demand for purchase money mortgages, the main other product of a mortgage bank. Mortgage lending is notoriously labor intensive. Nearly every lender, like Rocket, staffed up huge to meet the demand of the refi boom. Now, nearly every lender finds itself overstaffed for a mortgage market bust. Hence, layoffs. Every lender from the largest (Rocket) to the smallest is impacted. This is just how the mortgage industry works, though. It is both seasonal and dependent on the economic cycle.