NAR membership drops below 1.5M for first time in 3 years

As the National Association of Realtors grapples with an existential crisis, many members aren’t waiting around to see how the trade group emerges.

NAR’s total membership dipped below 1.5 million last month for the first time in nearly three years, according to NAR’s own monthly headcount tracking that placed it as the lowest level since May 2021. 

Membership of the trade group has fallen for four consecutive months and finished last month down 1.9 percent from a year earlier after a net loss of 29,000 brokers. Nationwide membership peaked in October 2022 when there were more than 1.6 million members taking advantage of an exploding house market.

NAR chief economist Lawrence Yun cited in a recent analysis the slowed housing market for the decline in membership, but said flailing home sales hasn’t created as large of a proportional drop as it did from 2008 to 2012.

The NAR analysis did not touch upon troubles that rocked the trade group last year, including the sexual harassment scandal that forced a leadership shuffle, a president’s exit after weeks on the job over a blackmail threat and the debut of the American Real Estate Association aiming to rival the longtime trade group.

Perhaps most concerning of all is the threat to NAR’s way of business, put into doubt by October’s $1.8 billion ruling in the landmark Sitzer/Burnett antitrust case. NAR and several brokerages were on the losing end of the trial centered on commissions, leading to further challenges and potential regulation of the way brokers will get paid going forward.

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Assuming NAR navigates these challenges, the housing market will still likely be a big determinant of membership headcount. After home sales and inventory hovered around historic lows last year, the trade group is hoping for brighter days as mortgage rates come down but has warned more troubled times are ahead. 

“Most state and local associations should anticipate further membership declines over the next 24 months,” Yun wrote.

— Holden Walter-Warner