Category: News

2022 NAR Member Profile: Median Realtor income jumps in 2021

John Yellig Leave a comment

The median gross income of a Realtor jumped almost 25% in 2021, as a shortage of housing inventory was the biggest obstacle to homebuyers seeking to purchase homes, according the 2022 National Association of REALTORS® Member Profile. 

NAR membership rose from 1.48 million at the end of 2020 to 1.56 million at the end of 2021 as people sought to take advantage of the hot housing market. Amid the increase in membership, the typical Realtor saw their business increase, with transaction sides increasing to 12 from 10 in 2020 and sales volume increasing to $2.6 million from $2.1 million. 

“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.” 

Median income for Realtors jumped to $54,330 from $43,330 in 2020. However, the amount earned varied widely by experience, as 57% of Realtors with two years or less experience earned less than $10,000, compared to 45% of members with 16 or more years’ experience, who made more than $100,000. 

Median experience was eight years, while 39% of respondents had 16 years or more in the business, and 25% had two years or less.  

Fifty-seven percent of respondents cited limited inventory as the main impediment to clients closing on home purchases, followed by 16% citing housing affordability and 12% citing difficulty finding the right property.  

Fifty-four percent of those surveyed were affiliated with an independent firm, and 87% were independent contractors at their firms. Thirty-six percent were compensated under a fixed commission split, 20% were compensated with a graduated split increasing with productivity and 18% with a capped commission split. 

By demographics, 66% of respondents were female, up from 65% in 2020, while the median age was 56, and 77% were white, 11% were Hispanic and 8% were Black. Ninety-three percent had some post-secondary education, and 31% completed their bachelor’s degrees. 

NAR conducted the 97-question survey in March, emailing it to a random sample of 176,494 Realtors and receiving a total of 9,220 responses. 

NAR reaches agreement with Department of Justice

Will Mendelson Leave a comment

After being sued by the Department of Justice on Nov. 19, NAR reached an agreement later that day with the U.S. Department of Justice to create rules that more explicitly lay out the intent of NAR’s Code of Ethics and MLS policies regarding commissions and MLS participation. 

Before reaching the agreement, the Department of Justice filed a lawsuit against the National Association of Realtors, alleging that the organization violates antitrust law, including commission arrangements and consumer disclosure requirements. 

In the lawsuit, the federal government alleges that NAR has adopted a “series of rules, policies, and practices governing, among other things, the publication and marketing of real estate, real estate broker commissions, as well as real estate broker access to lockboxes, that have been widely adopted by NAR’s members resulting in a lessening of competition among real estate brokers to the detriment of American home buyers,” the DOJ said in a press release on Nov. 19.

Specifically, the DOJ alleges that NAR violated the Sherman Act and “restrained” free trade in the following by:

  • “prohibiting NAR-affiliated multiple-listing services (“MLSs”) from disclosing to prospective buyers the amount of commission that the buyer broker will earn if the buyer purchases a home listed on the MLS;
  • allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free;
  • enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered and to exclude homes with lower commissions from consideration by potential home buyers;
  • limiting access to the lockboxes that provide licensed brokers with physical access to a home that is for sale to only brokers who are members of a NAR-affiliated MLS.“

These practices have been largely adopted by NAR-affiliated MLS networks. The complaint alleges that, “Therefore, agreements among competing real estate brokers each of which reduce price competition among brokers and lead to lower quality service for American home buyers and sellers.”

NAR VP of Communications, in a statement emailed to Chicago Agent, said its rules and policies “have long sought to ensure fair and competitive real estate markets for home buyers and sellers. In response to questions from the DOJ, we have been working to explain our rules. We have reached an agreement that fully resolves the questions raised by the DOJ about the MLS system and commissions. Most of the changes seek to more explicitly state what is already the spirit and intent of NAR’s Code of Ethics and MLS Policies regarding providing information about commissions and MLS participation. We’re proud to be associated with the MLS system that puts consumers first and benefits home buyers, sellers and small business brokerages, and is constantly building upon these principles. While NAR disagrees with the DOJ’s characterization of our rules and policies, and NAR admits no liability, wrongdoing or truth of any allegations by the DOJ, we have agreed to make certain changes to the Code of Ethics and MLS Policies while we remain focused on supporting our members as they preserve, protect and advance the American dream of homeownership.”

See also: updates on the buyer-side lawsuit against NAR.