A struggling housing market characterized by elevated prices and high borrowing costs for home loans has depressed demand for homes. This dynamic has contributed to a fall in the number of real estate agents working in the industry.
There are tens of thousands fewer real estate brokers and sales agents, according to data from the Federal Reserve Economic Data.
Read more: How to Get a Mortgage
In 2023, there were 440,000 people in America working as real estate agents. This was down from a time before the pandemic when in 2019, there were 549,000.
The fall in real estate agents comes at a time when mortgage rates are at historic highs. Last year, borrowing costs for a mortgage hit two-decade highs. Meanwhile, prices for homes are at record levels. These twin forces are dissuading buyers from getting into homeownership.
Read more: Find the Lowest Rates From Top Mortgage Lenders
A slowing housing market means business has slowed, forcing realtors to rethink their place in the sector and even struggling to make a living.
A Florida-based real estate agent April Strickland told The Washington Post that there are more realtors working in her Gainsville market than homes being sold.
“Quite frankly, realtors are running out of money,” Strickland was quoted as saying.
Saad Munir, a Boston-based vice president at Torii Homes, told Newsweek it’s hard to do business these days in the real estate market.
“I’m sure there are plenty of agents leaving,” he said. “A lot of agents are struggling right now.”
Buyers pausing their plans to purchase homes is hurting buyers’ agents. Meanwhile, sellers waiting to put their homes on the market are reluctant to re-enter a housing market with rates elevated, which has also led to fewer listings and damaged business for sellers’ agents.
“The market is tough right now for buyers meaning many buyers’ agents are struggling to keep business consistent,” Munir said. “And there aren’t that many listings either which means it’s tough to be a productive and consistent sellers’ agent.”
Another dynamic that may be complicating the future of the real estate business, Munir said, are rule changes that are set to come into effect in the summer where the way realtors charge commissions will shift. Sellers are unlikely to set the fees that a buyer’s agent gets paid, which historically has been at 6 percent shared between realtors.
Experts have suggested that this shift could mean real estate agents are forced to work harder at making a living.
Read more: How to Buy a House With Bad Credit
“Tack on the commission changes coming and it’ll make it even tougher especially if you don’t know what your differentiator is in the business and what makes you special,” Munir told Newsweek. “Most agents aren’t able to articulate that.”
Munir suggested, though, these changes could be good for the profession.
“An exodus has largely been expected and that’s good for the ones that remain honestly,” he said.
A real estate agent tours a home for sale during a brokers open house on April 16, 2019, in San Francisco, California. It’s been a tough time for real estate agents and brokers amid a slowing housing market.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
This post was originally published on this site be sure to check out more of their content.
