FILE – A For Sale sign hangs in front of a home in Sacramento, California, Thursday, March 3, 2022. HomeServices of America, a real estate company owned by Warren Buffett’s Berkshire Hathaway, has agreed to pay $250 million to settle lawsuits across the country that claim the real estate agents’ longstanding practices forced U.S. homeowners to pay artificially inflated commissions when selling their homes. (AP Photo/Rich Pedroncelli, File)
(NewsNation) — Rising mortgage rates, dwindling housing inventory and skyrocketing home prices have Americans at a historically pessimistic view of the housing market, and now real estate agents are pulling out of the industry.
According to the Bureau of Labor Statistics, the number of full-time real estate agents and brokers will be 440,000 in 2023, down more than 70,000 from the previous year.
In 2019, when the average long-term mortgage interest rate was around 4%, 543,000 people were working full-time as real estate agents.
April Strickland, a real estate broker in Gainesville, Florida, recently told The Washington Post that the current business environment is the toughest she’s ever experienced, even slower than the years following the 2008 financial crisis.
“Frankly, Realtors are running out of money,” Strickland said.
According to the National Association of Realtors, sales of existing homes fell to the lowest level in 28 years last year.
The market downturn is the result of several challenges, including mortgage rates more than double what they were a few years ago, housing supply remaining low and prices at record highs.
A January analysis by the Consumer Federation of America found that nearly half of the real estate agents surveyed had sold one or no homes in the previous year, in part because many of them work irregular hours and have other jobs, the report said.
New rules resulting from a $418 million antitrust settlement may also cause real estate agents to rethink their careers.
In March, the National Association of Realtors agreed to settle more than a dozen lawsuits that accused the NAR of imposing rules that inflated real estate commissions. As a result, real estate agents will face new rules that could change the way they are paid.
For example, starting in August, real estate databases will no longer include commission offers to buyer’s agents, according to The Washington Post, meaning agents can no longer expect to receive a cut of the seller’s income.
A report from investment bank Keefe, Bruett & Woods said up to 30% of industry fees could disappear, The Wall Street Journal reported.
