Big banks' Q2 earnings to shed light on gloomy U.S. mortgage outlook

As the U.S. Federal Reserve continues to raise interest rates, analysts and economists in the United States will be monitoring to see how banks

mortgage operations are doing during their second-quarter earnings this month.

The mortgage industry is shrinking after adding tens of thousands of employees between 2018 and 2020 to manage the surge in mortgage originations and refinancings brought on by low interest rates

According to experts and economists, U.S. banks including JPMorgan Chase & Co. and Wells Fargo & Co.

have begun making staff reductions, and more industry layoffs are anticipated in the coming months.

According to Doug Duncan, chief economist of Fannie Mae, which along with Freddie Mac backs many U.S. mortgages

we'll see the bulk of layoffs over the next month or two." Layoffs often follow a change in the market by around six months.

After the Fed raised rates by 0.75 percentage point in June, home loan interest rates soared to a 14-year high

According to Freddie Mac, the average rate on a 30-year fixed-rate mortgage, the most popular type of house loan in the United States, was 5.3 percent as of July 7 compared to 2.9 percent a year earlier.