Real estate agents Compass and Redfin have fired their employees. This indicates that the housing market is chilling as rising interest rates raise mortgage prices and rising inflation weighs on income.
Glenn Kelman, CEO of Redfin, has announced that it will reduce the company’s workforce by about 8%. Email to employees On Tuesday, we quoted subsidence demand, which was 17 percent lower than last month’s forecast.
“Today’s layoffs aren’t letting people go, but are the result of Redfin’s lack of income,” Kelman said. Redfin hired about 6,500 people at the end of 2021.
Compass said in a statement that he was dismissing 10 percent of his employees “due to the obvious signs of slowing economic growth.” The compass employed about 4,800 people at the end of 2021.
Declining home sales and rising mortgage rates are weakening the housing market and stressing the real estate industry. Interest rates on fixed-rate mortgages for 30 years have risen to 5.65 percent. This is the highest level since 2008. Mortgage Bankers Association Said on Wednesday.
“Refinancing activity is more than 70% lower than last year because mortgage rates are well above 5%,” said Joel Kan, vice president of economics and industry forecasting for the Group.
According to Kelman’s email, Redfin offers employees up to four months of severance pay. He said he expects growth to slow down, what he describes as a “housing downturn.” Redfin’s share has fallen by nearly 80% in the last six months.
“Home sales can last for years instead of months,” Kelman wrote to an employee. “I don’t know what will happen if the company doesn’t work after going down from $ 97 to $ 8 per share.”
