Realtor income (and expenses) up, inventory is top pain point
NAR's annual member profile found that agents earned more and upped their sales volume despite the market slowdown, while transaction sides held steady.
Key points:
- Low inventory was overwhelmingly the biggest issue facing clients, agents indicated in the 2023 NAR Member Profile.
- The overall median NAR member income increased in 2022 to $56,400, while the typical sales agent earned $46,300.
- Expenses were also up last year, in part due to the high cost of gas, an NAR economist told Real Estate News.
It's not the easiest time to be a real estate agent. For months, economists and experts have discussed how sky-high mortgage rates and low inventory are wreaking havoc on the U.S. real estate market, but now we also have the perspective from those with boots on the ground.
In the newly released 2023 NAR Member Profile — an annual survey of the business activities and characteristics of real estate professionals — respondents identified the biggest factor keeping clients from closing deals. Unsurprisingly, low inventory reigned supreme, with 32% of Realtors citing inventory as the biggest barrier, followed by housing affordability and difficulty in finding the right property.
Despite affordability issues plaguing many buyers, very few survey respondents said a client's ability to save up for a down payment was a major factor limiting sales. Another non-issue? A client's ability to sell their existing home. Just 1% of Realtors cited either factor as a top concern.
Interestingly, even as the market slowed in the latter half of 2022, the median number of transaction sides was unchanged from 2021, remaining at 12. And Realtors' median sales volume actually went up in 2022, hitting $3.4 million, compared with $2.6 million in 2021. That may be largely due to an increased number of agents achieving $10 million or more in sales volume in 2022 — 17%, vs. 14% the year prior.
The median gross income of all Realtors, including sales agents, managers and broker-owners, was $56,400, a slight uptick from $54,300 in 2021. When specifically looking at sales agents, the gain was slightly larger: Median gross income was $46,300 in 2022, up from $43,300 in the prior year.
The typical Realtor reported having 11 years of experience and worked roughly 30 hours per week. And 62% of Realtors are women — down from 66% a year prior. Experience certainly matters in real estate sales, and it shows in income. Respondents with 16 years or more experience had a median gross income of $80,700 last year, down from $85,000 in 2021. And Realtors with 6-15 years of experience weren't far behind, grossing $75,500.
Another big change from last year? Expenses were considerably higher for agents in 2022, NAR Deputy Chief Economist and Vice President of Research Jessica Lautz told Real Estate News.
"One of the things that did stand out to me is that expenses are certainly up," she said, noting that the typical agent spent $8,210 on business expenses in 2022 compared to $6,250 in 2021. "When we think about the cost of gas last year being higher and how Realtors have to actually take their clients around to go see homes, that's going to impact their bottom line."
Despite the costs involved in doing business and the modest income earned by the typical sales agent, most Realtors plan to stay in real estate. Of the NAR members surveyed, 76% said they were "very certain" they would remain active as a real estate professional in the next two years. Another 17% said that they were "somewhat certain," and just 7% reported being "not certain."