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As the housing market continues to struggle with high rates, low inventory and unpredictable demand, new data shows that the National Association of Realtors’ ranks are now shrinking for the first time in years.
The data, from NAR’s latest Monthly Membership Report, shows that as of April 30 the organization had about 1.54 million members. That’s up slightly compared to the roughly 1.53 members NAR had one month prior. But, critically, it’s down year over year about 0.66 percent compared to the 1.55 million members NAR had at the end of April 2022.
NAR’s latest numbers are also down from the more than 1.58 million members the organization had at the end of 2022.
Nick Gerli, CEO and founder of real estate data firm Reventure Consulting, noticed the drop and on Friday plotted NAR’s membership growth rate going back to the 1980s. Gerli’s graph shows NAR’s growth rate spiking during the early part of the COVID-19 pandemic when the housing market boomed but sharply declining more recently.
Realtors are officially quitting.
The growth rate in Realtors registered with the NAR officially went negative in May 2023.
That's the first contraction in the # of Realtors in America since the 2008 crash.😬 pic.twitter.com/IHQt5MHAha
— Nick Gerli (@nickgerli1) May 19, 2023
In the more distant past, NAR’s growth rate went negative as the housing market collapsed in 2008 and remained negative for years afterward. But it had recovered by the middle part of the last decade, and it remained positive all the way up until the present.
In a thread on Twitter, Gerli concluded that “Realtors are officially quitting” right now “because home prices are now on the decline.”
In another chart, Gerli also showed a strong correlation between home prices and NAR membership.
Credit: Nick Gerli and Twitter
However, despite the negative growth rate, Gerli also noted on Twitter Friday that overall membership in NAR is still “way higher than the previous peak in the mid-2000s.”
Indeed, NAR’s data shows that membership hit a pre-Great Recession peak in 2006 with about 1.36 million members — far lower than the trade group’s current total. Membership then fell over the ensuing years and hit a low point at just under 1 million members in 2012.
NAR membership consistently rose during the following years, and the organization’s 2022 year-end total was higher than any other in history.
On Twitter, Gerli interpreted the high membership numbers but negative growth rate as “indicating that we are still in the very beginning stages of this housing downturn.”
While NAR’s now-negative growth rate may seem like an ominous signal, it also wasn’t unexpected. Indeed, real estate observers in recent months have repeatedly indicated that agents tend to leave the industry in a slower market.
NAR itself has also anticipated falling membership numbers and earlier this month voted to raise dues — as well as tie future hikes to inflation — in an effort to minimize deficits. Even so, NAR expects to dip into its reserves next year as operating costs outpace revenue.
Lawrence Yun, NAR’s chief economist, recently predicted that the organization will ultimately experience a 15 percent drop in membership numbers over the next couple of years — meaning the new negative-growth rate may simply be the start of a much larger trend.
Such a decline could result in a $10 million-$15 million budget deficit, NAR Treasurer Greg Hrabcak said at the Realtors Legislative Meetings in Washington, D.C., earlier this month.
Greg Hrabcak
Hrabcak ultimately concluded that with falling membership numbers and a looming budget shortfall, NAR could face challenging times in the future.
“NAR ended 2022 with a strong financial position with record high membership,” Hrabcak said at the gathering. “With that said, the strength will be tested in the next few years under challenging conditions.”
