Mortgage volumes at Wells Fargo slowed further in recent weeks, leaving some workers idle and sparking concerns the lender will need to cut more employees as the U.S. housing slump deepens.

According to people familiar with company figures, there were approximately 18,000 loans in the bank's retail origination pipeline at the start of the fourth-quarter. The figure is up to 90% lower than the 18,000 loans it had in its retail origination pipeline a year prior, when Covid was booming. These people declined to speak on internal matters.

The U.S. market for housing has been on a rollercoaster ride in recent years. It took off in 2020 because of easy-money policy and remote work. However, it has been slowing down since the Federal Reserve increased rates. With borrowing costs rising to more than 7.5% for a 30-year loan (from 3% last year), homebuyers are being squeezed. The Fed will likely increase its benchmark rate Wednesday, which could mean higher rates.

This has put pressure on the home loan industry, especially firms like Rocket Mortgage , which thrived on loan refinancings. It is expected that this will lead to consolidation between newer nonbank players who rushed to service customers after the U.S. banks left the market.

Wells Fargo was historically the most dependent upon mortgages among the six largest U.S. bank. But that has begun to change under CEO Charlie Scharf, who has said that the bank is looking to shrink the business and focus primarily on serving existing customers.

In October, the bank warned investors that the housing market could slow further after saying that mortgage originations fell nearly 60% in the third quarter.

CFO Mike Santomassimo said that "we expect it remains challenging in the near future." "It is possible that we will have a further decrease in mortgage banking revenue during the fourth quarter, when originations are seasonalally slower."

Employees are worried after the bank cut workers in April. Internal projections suggest that more employees will leave. Local news outlets have reported when Wells Fargo offices have been required to disclose impending job cuts in a municipality.

One source says that mortgage loan officers earn commissions mainly from closing loans. Their ranks are expected to plummet to less than 2000 from more like 4,000 at year's beginning. Many salespeople haven't closed a single loan in recent weeks, this person said.

Another person claimed that many exits were voluntary and bankers sought out other opportunities. Thus, it is hard to predict when staffing levels will change or whether they will.

"The recent changes we made are the result a broader rate environment, consistent with the response from other lenders in industry," a Wells Fargo spokesperson said in a statement. "We constantly review and adjust our staffing levels to meet market conditions and the requirements of our businesses.

The bank said last month that its total workforce shrank by about 14,000 people in the third quarter, a 6% decline to 239,209 employees.

Wells Fargo shares are down about 2% since the start of the year.