Redfin and Compass layoffs amid housing downturn

Real estate brokerage Compass and Redfin are both laying off staff, a sign that the housing market is slowing as higher interest rates make mortgages more expensive and rising inflation pressures income.

Glenn Kellman, CEO of Redfin, announced a cut of about 8 percent of the company’s workforce in Send an email to employees On Tuesday, it cited a dip in demand, which was 17 percent lower than expected last month. “Today’s layoffs are the result of Redfin’s revenue shortfall, not people being laid off,” Kellman said. Redfin employed about 6,500 people at the end of 2021.

A Compass spokesman said in a statement that Compass is laying off 10 percent of its staff “due to clear indications of slowing economic growth”. Compass employed about 4,800 people at the end of 2021.

Declining home sales and rising mortgage rates have hampered the housing market, adding to the pressure on the real estate industry. The 30-year mortgage rate rose to 5.65 percent, the highest level since 2008 Mortgage Bankers Association He said on Wednesday. “With mortgage rates above 5 percent, refinancing activity continues to be down more than 70 percent from last year,” said Joel Kahn, associate vice president of economic and industry forecasting.

Redfin offers employees up to four months of severance payments, according to Mr. Email Kelman. He said he expected gradual and slower growth in what he called a “housing decline”. Redfin’s shares are down nearly 80 percent over the past six months.

“We may be facing years, not months, of declining home sales,” he said. Kellman Books for Staff. “If the drop from $97 per share to $8 doesn’t disturb the company, I don’t know what it does.”