With U.S. inflation climbing to 2.6% in October—fueled by rising housing and insurance costs—and mortgage rates having edged back above 7%, homeownership remains a distant goal for many living in the U.S. For real estate agents, this economic reality can present both challenges and opportunities, and determine strategies in markets across the country.
Data from RentSpree and the U.S. Census reveal that Florida, with around 251,000 real estate agents, California with approximately 277,000, Texas with about 171,000, and Georgia with over 122,000, lead the nation in agent numbers. New York and Arizona follow closely with about 69,000 and 56,000 agents, respectively. Yet each of these states faces unique real estate hurdles that shape the prospects for both home sales and rentals.
In Florida, high insurance costs, exacerbated by frequent natural disasters, have turned into a significant barrier to homeownership. Home insurance premiums have climbed 45% from 2017 to 2022, contributing to a slowing sales market. In California, where housing affordability is a longstanding issue, low inventory and intense competition have driven the average home value to $771,057, with Los Angeles nearing $947,245, according to Zillow data. Texas, while more affordable with an average home price around $300,267, is also impacted by rising interest rates; only 38 percent of Houston-area households could afford a median-priced home in the third quarter, according to the Houston Association of REALTORS. In Georgia, Atlanta’s housing prices are up 3.67% year-over-year, putting additional strain on buyers.
These for-sale market challenges make the rental sector a critical avenue for agents, especially in states with intense competition among high numbers of agents. Luckily, many of these markets are showing significant demand for rentals, making them lucrative spaces for real estate professionals. California’s rental market is highly competitive due to its urban density, and Florida sees high in-migration from out-of-state residents who need housing quickly. Texas continues to grow, with nearly half of its population increase attributed to new residents in 2022. Atlanta also benefits from robust job growth, especially in professional and business services, supporting a strong rental market.
Last year, 44.5 million households in the U.S. rented. Agents who pivot toward rentals can tap into a steady revenue stream. In California, the median rent across property types was $2,800 in November; in Florida, it was $2,455, according to Zillow. Rentals aren’t merely a fallback in these high-cost housing markets—they should be part of a well-rounded strategy, offering real estate agents a way to diversify and succeed in today’s economy.
In a shifting landscape where traditional paths to homeownership are less accessible, agents who embrace the rental market can not only sustain their businesses but also help meet the critical housing needs of an increasingly rent-reliant population.
Michael Lucarelli is the CEO of RentSpree.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
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