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According to CNBC on Wednesday, mortgage volumes at Wells Fargo (NYSE:WFC) have further declined in recent weeks, raising concerns the lender will need to cut more jobs.
Citing people familiar with the matter, CNBC said some workers have been left idle as the housing slowdown takes a toll. Earlier today, Opendoor (NASDAQ:OPEN) announced job cuts due to the current situation in the housing market.
Wells Fargo is said to have had roughly 18,000 loans in its retail origination pipeline in the first few weeks of the fourth quarter, representing up to a 90% decline from a year earlier, following a housing boom during the pandemic.
As interest rates have risen this year, resulting in a rise in mortgage rates, and inflation has soared, squeezing potential homebuyer budgets, housing demand in the U.S. has tumbled.
Historically, among the six largest U.S. banks, Wells Fargo has been most reliant on mortgages and, according to relbanks.com, is the largest mortgage originator in the U.S., with a market share of over 15%.
On October 14, Wells Fargo CFO Mike Santomassimo told analysts that they expect the housing market “to remain challenging in the near term.”
“It’s possible that we have a further decline in mortgage banking revenue in the Q4 when originations are seasonally slower,” he added.
