The biggest U.S. bank, JPMorgan Chase & Co., has started laying off employees as the U.S. housing market continues to cool amid rising mortgage rates.

The decision will impact more than 1,000 employees, about half of which will be moved to different divisions within the bank, according to people familiar with the matter who asked not to be identified discussing personnel matters, Bloomberg News reported.

The move comes as the nation’s booming housing market takes a turn amid record high inflation, spurring the Federal Reserve to take aggressive moves, including a 0.75% bump to its benchmark borrowing rate last week. It was the biggest single rate hike since 1994.

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Why is JPMorgan laying off people? “Our staffing decision this week was a result of cyclical changes in the mortgage market,” a spokesperson for JPMorgan said in a statement Wednesday, Bloomberg reported. “We were able to proactively move many impacted employees to new roles within the firm, and are working to help the remaining affected employees find new employment within Chase and externally.”

Wells Fargo & Co., the U.S.’s biggest mortgage lender bank, has also been laying off and reassigning employees in its home lending division, according to people familiar with the company who also asked not to be identified discussing private information, Bloomberg reported.

Other major real estate companies including Redfin and Compass have also recently announced layoffs as the U.S. housing sales drop and pessimism begins to seep into the market. Redfin announced an 8% cut to its workforce, equaling about 470 jobs. Compass planned to reduce its staff by about 10%, according to a regulatory filing.

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If the housing market is cooling, why are prices still high? For the fourth straight month this year, existing home sales dropped in May, down 3.4% from April and down 8.6% from May of last year, according to data posted by the National Association of Realtors on Tuesday.

“Home sales have essentially returned to the levels seen in 2019 — prior to the pandemic — after two years of gangbuster performance,” said Lawrence Yun, the National Association of Realtors’ chief economist.

However, prices still remain high. The nation’s median existing home sale price hit $407,600 in May, exceeding $400,000 for the first time. That’s up 14.8% from a year ago, according to the National Association of Realtors.

Yun predicted sales numbers to continue dropping in coming months, “given housing affordability challenges from the sharp rise in mortgage rates this year.”

“Nonetheless, homes priced appropriately are selling quickly and inventory levels still need to rise substantially — almost doubling — to cool home price appreciation and provide more options for home buyers,” Yun said.

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