BAM Key Details: 

  • After the third consecutive drop in membership—and an annual drop of 2.1% in January—Lawrence Yun, Chief economist for the National Association of Realtors (NAR), is warning of further declines in membership over the next 24 months. 
  • While the latest NAR report on membership points to seasonality and difficult market conditions to explain the most recent membership declines, other factors include fallout from the Sitzer/Burnett lawsuit, NAR’s own leadership challenges, and a recent announcement of an alternative association for real estate agents. 

Membership in the National Association of Realtors® (NAR) dropped 2.1% year over year in January, according to its latest report. The news prompted Chief Economist Lawrence Yun to put the losses in context as he warned of “further declines in membership over the next 24 months.” 

Further membership decline should be anticipated, given the reduction in business opportunities over the past two years.

Lawrence Yun

NAR Chief Economist

NAR-latest-NAR-membership-report-Jan-2024

NAR membership in January dropped to 1,515,837—2.1% down from a year earlier, 5.3% down from the peak of 1.6 million reached in October 2022, and the lowest level since May 2021. 

Last month, NAR reported a net loss in members for the first time since 2012. 

The impact of difficult market conditions and a surfeit of real estate agents

The latest NAR membership report outlines the challenges faced by the organization—specifically those presented by the housing market and difficult business conditions. 

Yun pointed to the net 400,000 agents who left the industry in 2008–2012, adding that, given the “current housing downturn” in 2022–2023, with home sales lower than they were in the 2008–2012 downturn, the net loss of 85,049 members since the peak reached in October 2022 falls short of the decline than should be expected, given the circumstances. 

Given the lag time of 18-24 months for Realtors leaving the industry (and, consequently, dropping their NAR membership) as a result of difficult market conditions like high interest rates, low inventory, and high home prices, Yun warned of further declines in NAR membership throughout 2024 and 2025. 

Most state and local associations should anticipate further declines in membership over the next 24 months based on the lag effects of past housing cycles.

Lawrence Yun

NAR Chief Economist

NAR-Existing-home-sales-Jan-2024
NAR-Inventory-Jan-2024

Aside from difficult market conditions, multiple reports—including one by the Consumer Federation of America (CFA)—point to a surplus of real estate agents. The CFA report showed 49% of agents sold either one or zero homes in 2023. 

The harder it is for real estate agents to earn a good living, the more membership in realtor associations, and particularly NAR, is likely to decline. 

The impact of seasonality on NAR membership

Yun also addressed seasonality as a factor in NAR membership decline, saying they typically see drops in the fall through winter. 

Membership didn’t drop in every state, though. Compared to the year before, membership numbers increased in— 

  • Florida
  • Ohio
  • Tennessee
  • Missouri
  • South Carolina
  • Indiana
  • Alabama
  • Arkansas
  • Mississippi
  • Montana
  • Maine
  • West Virginia
  • Puerto Rico
  • The Virgin Islands

To date, the membership figures are holding on much better than the market dynamics suggest. Existing-home sales fell to the lowest since 1995, nearly 30 years. Inventory of listings is at historic lows.

Lawrence Yun

NAR Chief Economist

Month over month, only four states saw an increase in NAR membership from December 2023 to January 2024: 

  • Nebraska
  • Rhode Island
  • Utah
  • Mississippi

Puerto Rico saw no change. And all other states had month-over-month losses.

The impact of NAR’s own issues on its membership

Aside from the external factors mentioned above, NAR has its own internal challenges that have driven some members out of the association. 

One such challenge was the scandal that erupted last year with a New York Times exposé alleging sexual harassment and a toxic workplace. Next, the trade organization installed its third president in under 12 months after the previous two resigned due to scandal or blackmail. 

Finally, we have the recent announcement of an alternative association for realtors—AREA—created by The Agency founder Mauricio Umansky and NAR Accountability Project founder Jason Haber

And all of the above doesn’t even take into account the terms of recent settlements in the Sitzer/Burnett lawsuit (as well as similar suits like Moehrl and copycat suits like Gibson, et al). We already know one of the terms of the Anywhere and RE/MAX settlements was the removal of any obligation for associated agents, teams, and brokerages to join NAR or continue with their NAR membership. 

Stay tuned for further developments on the Keller Williams settlement, the HomeServices petition, and NAR’s plan to appeal Sitzer/Burnett.