Overblown rumors of demise? NAR has lost only 45K members since December

Overall, while NAR membership is in decline, it is still quite high by historic standards and above what many observers expected when membership dues were required by Jan. 1, 2024. In modern times, membership hit a low point of 963,478 in February 2013 and climbed to a high of 1.60 million in October 2022 before gradually declining. Membership dipped just below 1.5 million in February before rebounding slightly since then.

Scrub, scrub, scrub?

NAR recently made the decision to remove decades of historic membership data from its website. A NAR spokesperson declined to answer why the decision was made or who made it, but they said the trade group will be sharing updated counts with its constituents going forward.

“NAR will continue to report its membership rates directly to our members on a regular basis,“ a spokesman told HousingWire. “You can find more information in our recent update in Realtor Magazine.“

In that article, NAR said its April membership figures “allayed fears that membership would decline more than expected as a result of organizational changes or the pending class-action litigation settlement. The numbers indicate that members continue to recognize the value of the advocacy, resources and tools available through NAR.“

NAR treasurer Greg Hrabcak was quoted as saying that the number of Realtors remains “several percentage points ahead of the association’s forecast.“

NAR chief economist Lawrence Yun has repeatedly said that he expects membership to decline over the next two years before potentially rebounding in 2026.

In the recent Realtor Magazine article, Yun noted that there’s generally a lag time of 18 to 24 months between when the market cools and when membership falls. Realtors who have paid their membership dues by Jan. 1 often remain members even after leaving the industry for other opportunities. Some will retain their membership the following year in hopes of an improved market.

It remains unclear how members can access historic membership or state-based data as the webpages that previously hosted the reports were taken down. Instead, the NAR now has a generic page on membership.

Future renewals?

Industry analysts and professors say the trade group is grossly underestimating how many members could wash out in the coming years as a result of the rule changes from Sitzer/Burnett. The changes are likely to put pressure on buyers’ agents and shrink the $100 billion annual commission pot by as much as $30 billion over time, according to analysts at Keefe Bruyette & Woods (KBW).

Economists and analysts say the “decoupling” of buyer and seller commissions will convince a significant number of Realtors to abandon the field. How many is unclear. But the KBW forecast projected that changes to the commission structure could cause between 60% to 80% of Realtors to leave the industry.

Meanwhile, Sonia Gilbukh of the City University of New York and Paul Goldsmith-Pinkham of the Yale School of Management estimated that about 56% of agents would exit the market if one side’s commission remained at 3% while the other became more competitive, Gilbukh told the The Washington Post.

And a 2015 paper in the Rand Journal of Economics predicted that a 50% reduction in commissions would result in 40% fewer agents.

The commission lawsuit settlements also stipulate that brokerages can no longer require agents to be members of NAR, which could contribute to membership declines going forward.

For now, the NAR membership data largely tells the story of for-sale inventory and home sales. Florida and Texas, which combine to have about 40% of the nation’s housing stock, each saw Realtor membership increases in 2023. And Arkansas, which had 11,251 NAR members at the end of 2023, saw the largest annual percentage uptick in membership among all states at 3.4%.

“When there are fewer market opportunities, some people leave the business. It’s as simple as that,” Yun concluded.