(Reuters) – Real estate brokers Compass Inc and Redfin (NASDAQ:) Corp said on Tuesday they will cut jobs as rising mortgage rates and the prospect of aggressive rate hikes eat into homebuying demand.
Compass said it will layoff 450 employees, about 10% of its current workforce, and Redfin will cut about 470 jobs, about 6% of its total workforce.
“With May (homebuying) demand 17% below expectations, we don’t have enough work for our agents and support staff, and fewer sales leave us with less money for headquarters projects,” Redfin Chief Executive Officer Glenn Kelman wrote in a blog.
Redfin said it could be facing years, not months, of lower home sales and the layoffs were a result of decline in revenues.
A decade-long boom in housing prices from the United States to Europe and Asia is facing its first real test as borrowing costs rise and high inflation squeeze households budgets.
Redfin and Compass are the latest companies to cut jobs after Coinbase (NASDAQ:) Global Inc said earlier on Tuesday that it will slash 1,100 jobs, or 18% of its workforce.