NAR membership up even as transactions decline
Member count increased by more than 6,500 in July, but the "fiercely competitive business environment" could spur attrition in the coming months.
Key points:
- Membership for the organization was just over 1.56 million at the end of July, up slightly from June but down around 1% year-over-year.
- Given the decline in home sales, NAR's chief economist expects membership to drop 5% year-over-year by December.
- Florida continues to have the highest NAR participation with more than 223,000 members in July.
It's been nearly a year since rising mortgage rates put the brakes on an overheated real estate market. But so far, that hasn't led to a big drop in the number of real estate agents.
The National Association of Realtors reported that it had 1,566,354 members at the end of July, up by 6,547 from June and down just 1% (14,617) from a year ago.
Among the 10 states with the largest membership totals, Florida, Texas and Georgia posted year-over-year increases. Florida currently has the highest number of NAR members, boasting more than 223,000 in July.
The membership numbers are holding up better than expected, said Lawrence Yun, chief economist at NAR. But that could be changing. Yun believes steeper year-over-year declines are likely as interest rates remain elevated and market activity cools further.
Agent attrition likely to increase by end of year
By December, he expects membership to be 5% lower than it was a year prior, in part because 2022 was a record year for NAR membership, ending with slightly more than 1.58 million members.
"It is a fiercely competitive business environment," Yun said in an email.
Given the state of existing home sales, which were down nearly 19% year-over-year in June to an annualized rate of 4.16 million transactions, there appears to be a glut of agents and too few sales to go around.
Other leaders in the industry are also expecting the number of agents to decline. During an Aug. 3 earnings call, eXp Founder and CEO Glenn Sanford said he believes there are too many agents out there given the current transaction levels, and some part-time agents are likely hanging on to their licenses while generating income in other ways in what is otherwise a still-robust economy.
"We haven't seen the attrition in the industry overall that would be reflective of the real estate transactions going on," said Sanford during the earnings call. "So I certainly expect there to be a fair bit more attrition."