Mortgage rates are going up and home sales are dropping.
According to the Securities and Exchange Commission, the two companies announced 8% and 10% cuts to their workforces.
Both companies had their shares fall. The stock hit a new 52 week low.
Affordability has been crushed due to rising rates and overheated home prices. The fall in home sales is expected to get worse.
Mortgage demand is the lowest it's been in over two decades. According to Mortgage News Daily, rates have taken off since the beginning of the year. Concerns over inflation hit the bond market as rates shot up more than half a percentage point.
Due to the signals of slowing economic growth, we have taken a number of measures to safeguard our business and reduce costs, including pausing expansion efforts and the difficult decision to reduce the size of our employee team.
Glenn Kelman, the company's CEO, wrote a regular post on the company's website. With May demand below expectations, Kelman wrote, "We don't have enough work for our agents and support staff, and less sales leaves us with less money for headquarters projects."
"With mortgage rates increasing faster than at any point in history, we could be facing years, not months, of fewer home sales." I don't know what happens if a company's share price goes from 97 to 8.
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