In regions with many agents and difficult sales markets, experienced real estate professionals are turning to leasing for growth

With US inflation rising to 2.6% in October—fueled by rising mortgage and insurance costs—and mortgage rates falling above 7%, home ownership remains a distant goal for many living in the US For real estate agents, this fact economics can produce both. challenges and opportunities, and determine market strategies across the country.

Data from RentSpree and the US Census show that Florida, with about 251,000 real estate agents, California with nearly 277,000, Texas with about 171,000 people, and Georgia with more than 122,000, lead the country in agent numbers. New York and Arizona follow closely behind with about 69,000 and 56,000 agents, respectively. Yet each of these states faces unique barriers to real estate sales and rentals.

In Florida, high insurance costs, which have increased due to frequent natural disasters, have become a significant barrier to homeownership. Home insurance premiums have increased by 45 percent from 2017 to 2022, contributing to a slower sales market. In California, where housing affordability is a long issue, low inventory and high competition have pushed the median home price up to $771,057, while Los Angeles is closer to $947,245, according to Zillow data. Texas, although more affordable with an average home price of $300,267, also contributes to rising interest rates; Only 38 percent of Houston households can afford a median-priced home in the third quarter, according to the Houston Association of REALTORS. In Georgia, Atlanta home prices rose 3.67% year-over-year, putting more pressure on buyers.

These market challenges make the rental sector a critical area for agents, especially in states with high competition among a large number of agents. Fortunately, many of these markets show high rental demand, making them very lucrative areas for real estate professionals. California’s rental market is highly competitive due to its urban density, and Florida is seeing high migration from out-of-state residents who need housing urgently. Texas continues to grow, with nearly half of its population growth attributable to new residents by 2022. Atlanta is also benefiting from strong job growth, particularly in professional and business services, supporting a strong rental market.

Last year, 44.5 million households in the US rented. Agents who turn to rentals can tap into a steady income stream. In California, the median rent for all property types was $2,800 in November; in Florida, it was $2,455, according to Zillow. Recruiting isn’t just a fallback in these expensive housing markets—it should be part of a well-rounded strategy, giving real estate agents a way to diversify and succeed in today’s economy.

In a changing world where traditional approaches to home ownership are less accessible, agents who embrace the rental market can not only sustain their businesses but also help meet the critical housing needs of a population that relies heavily on rental.

Michael Lucarelli is the CEO of RentSpree.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the editor responsible for this piece: [email protected].

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