It’s well known that 2021 was one of the best years in real estate history. However, a new report released by the National Association of REALTORS® (NAR) paints a clearer picture of how real estate professionals capitalized on the market frenzy despite a mix of challenges.
At a time when razor-thin inventory and mounting affordability issues strained buyers, NAR’s 2022 Member Profile showed that solid demand helped REALTORS® boost their sales volume, transactions and overall earnings.
“In the last year, REALTORS® continued to navigate a challenging housing market and cited the biggest factor holding back the housing market was tight inventory,” said Jessica Lautz, NAR vice president of demographics and behavioral insights. “As buyers relocated throughout the pandemic, housing affordability and lack of supply became a hurdle that agents and brokers found ways to overcome.”
NAR members generally benefited from the hot housing market and the surge in housing demand that resulted in 6.12 million existing homes sold. According to NAR, that marked the highest number of sales since 2006.
The typical NAR member tallied 12 transactions last year—up from 10 in 2020. Broken down further, more than half of the respondents in the report indicated that they closed 11 transactions or more—while nearly a quarter (22%) had 21 to 50 deals.
REALTORS® also saw their sales volume jump from $2.1 million to $2.6 million year-over-year, which also showed in agents’ general income.
The median gross income for REALTORS® was $54,300 in 2021, up from $43,330 in 2020. NAR members with 16 years of experience or more had a median gross income of $85,000, an increase from $75,000 the previous year, as their pay was typically commensurate with experience.
While agents increased their earnings last year, they also saw a slight increase in spending, with median business expenses for members totaling $6,250 in 2021—up from $5,330 in 2020. The lion’s share of respondents (62%) indicated that their business expenses fell between $1,000 and $19,999.
Referrals from past clients and customers continue to be a prevalent source of business for REALTORS®. The report showed that agents earned 16% of their business from repeat clients and customers. In comparison, 20% of their business came from referrals—up from 19% in 2020.
“All across our nation, REALTORS® are dedicated to building, improving and serving their communities,” said NAR President Leslie Rouda Smith, a REALTOR® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “In competitive and ever-changing market conditions, REALTORS® demonstrate professionalism, a strong work ethic and trusted knowledge as they guide consumers through the complex process of achieving property ownership.”
Despite the overall performance of last year’s housing market, activity was slightly stymied by several factors that have seemingly grown in prominence this year.
Fifty-seven percent of REALTORS® cited a lack of inventory as the leading reason limiting potential clients from completing a transaction, ahead of housing affordability (16%) and difficulty in finding the right property (12%).
While there have been gradual improvements to inventory levels in 2022, the persisting imbalance in supply versus demand continues to add upward pressure on home prices—which, in turn, strain affordability further. That, coupled with the rise in mortgage rates amid record-level inflation, has exacerbated the issue to a point where buyer demand has retracted slightly in recent months, based on recent reports from Zillow.
As such, there have been forecasts that home sales will retract this year compared to last year.
The prospect of slight declines in business for the future haven’t deterred membership, as new membership at NAR climbed to 1.56 million at the end of 2021 from 1.48 million at the end of 2020.
Despite the churn and forecasts of shifting market conditions, 79% of REALTORS® indicated that they would remain in the market for two more years.
Regarding demographics, 77% of REALTORS® were white, 11% were Hispanic/Latino, 8% were Black/African and 5% were Asian/Pacific Islanders.
Sixty-six percent of NAR members were women last year, climbing slightly from 65% in 2020.
“The real estate industry attracted new entrants who were increasingly more racially diverse and more likely to be women,” Lautz said. “The dynamic nature of real estate encourages varying business models, firm relationships and business activity.”
