A sluggish housing market marked by high home prices and high mortgage borrowing costs has led to a slump in demand for housing. This situation has led to a decline in the number of real estate agents working in the industry.
The number of real estate brokers and sales agents has fallen by tens of thousands, according to data from the Federal Reserve's Economic Data Center.
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In 2023, there were 440,000 people working as real estate agents in the U.S. That's down from 549,000 in 2019, before the pandemic.
The decline in real estate agents comes at a time when mortgage rates are at an all-time high. Last year, the cost of borrowing for a mortgage hit its highest level in two decades. Meanwhile, home prices are at record highs, two factors that are deterring buyers from buying a home.
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A slowing housing market means business is slowing, forcing real estate agents to rethink their place in the industry and making it harder to make a living.
“It's a big deal,” said April Strickland, a Florida-based real estate agent. The Washington Post There are more real estate agents working in the Gainesville market than there are homes for sale.
“Frankly, real estate agents are running out of money,” Strickland was quoted as saying.
“We're excited to be working with the Boston-based Torii Homes,” said Saad Mounir, vice president of Boston-based Torii Homes. Newsweek It's hard to do business in the real estate market these days.
“There will be a lot of agents quitting,” he said. “A lot of agents are struggling right now.”
Buyers who are pausing their home-buying plans are hurting buyers-side agents, while sellers who are waiting to put their homes on the market are reluctant to re-enter a housing market with rising interest rates, which is also leading to fewer listings and hurting business for sellers-side agents.
“It's a tough market for buyers right now and many buyers' agents are struggling to maintain a steady business,” Munir said. “Also, there aren't that many properties available, so it's hard to be a productive and steady sellers' agent.”
Mounir said another factor that could complicate the future of the real estate industry was rule changes due to come into force in the summer that would change the way estate agents charge commission. Sellers are unlikely to set the commission paid to buyers' agents, which has historically been split at 6% among agents.
Experts say the change could mean real estate agents will have to work harder to make a living.
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“Add in the upcoming commission changes and it will be even more challenging, especially if you don't know your business differentiator or what makes you special,” Munir said. Newsweek.Most agents can't articulate that.”
But Munir suggested the changes could be good for the profession.
“The exodus in large numbers was largely expected, but it's a good thing for those who are staying, honestly,” he said.
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