Health department adds to federal job cuts; Petco plans store closings; Pending home sales rise

More federal job reductions are expected after the Department of Health and Human Services on Thursday announced it is cutting 10,000 full-time positions across several health agencies.

The department said it will consolidate from 28 to 15 divisions, while reducing its overall regional offices from 10 down to five as part of larger efforts to reduce federal costs by $1.8 billion annually.

“We aren’t just reducing bureaucratic sprawl. We are realigning the organization with its core mission and our new priorities in reversing the chronic disease epidemic,” HHS Secretary Robert F. Kennedy Jr. said in a statement. “This Department will do more — a lot more — at a lower cost to the taxpayer.”

The Trump administration this year has announced agency job cuts that could affect more than 200,000 workers, and court filings this week indicated a “substantial” number of reductions are being planned at the Treasury Department. Significant nationwide pullbacks in the federal government’s office real estate footprint are also underway.

Petco is planning to shut 20 to 30 stores this year after closing 25 underperforming locations during 2024, as pet supply retailers respond to slumping sales after a spike in pet adoptions during the first two years of the pandemic.

San Diego-based Petco, with 1,398 stores nationwide, is still planning to invest up to $140 million this year in capital improvements, about 40% of which will be focused on tech infrastructure upgrades and store renovations, Chief Financial Officer Sabrina Simmons told analysts during a quarterly earnings call this week.

CEO Joel Anderson said a big priority this year will be staffing up and marketing the on-site veterinary hospitals that were significant drivers of Petco’s real estate expansion during the past five years, as the company looks to grow services to existing customers. “And that is a very low capital investment and a strong return on investment as we’ve already invested in the capital to build them,” Anderson told analysts.

Company executives said store closings were among factors in Petco’s 7% annual decline in total revenue for the fourth quarter ended Feb. 1, though same-store sales grew one-half percent; and a 2.2% revenue decline for full-year 2024. Petco narrowed losses from a year earlier but still posted a net loss of $13.8 million for the fourth quarter and a net loss of $101.8 million for full-year 2024.

The volume of U.S. single-family homes under contract to be sold rose 2% from the prior month in February, aided by factors including slightly lower mortgage rates, the National Association of Realtors reported Thursday. Still, the trade group said contract signings declined from a year earlier in all four tracked U.S. regions, contributing to a national drop of 3.6%.

“Despite the modest monthly increase, contract signings remain well below normal historical levels,” NAR Chief Economist Lawrence Yun said in a statement. “A meaningful decline in mortgage rates would help both demand and supply — demand by boosting affordability, and supply by lessening the power of the mortgage rate lock-in effect.”

Thirty-year, fixed-rate mortgage rates averaged 6.65% as of Thursday, according to the latest weekly national lender survey by government-backed housing financer Freddie Mac. That was down slightly from 6.67% a week earlier and 6.79% a year ago.

As reported by CoStar News sister site Homes.com, the NAR is forecasting 30-year fixed mortgage rates to continue dropping through the rest of 2025 to an average 6.4%. Sales of existing homes are expected to rise 6% from 2024.