The Short Answer
The real estate industry in 2025 is heavily oversaturated, with nearly two million licensed real estate agents competing for fewer home sales and tighter market conditions. Low barriers to entry, lingering effects from the pandemic boom, and a glamorized image of real estate careers have led to an excess of undertrained and inexperienced agents. Although many new real estate agents enter the industry each year, a significant portion struggle to earn a sustainable income or build long-term careers.
Without stronger licensing standards, enhanced education requirements, and better professional development, this imbalance is likely to continue. For real estate investors, working with experienced agents who are investor-focused, who offer access to off-market deals, strong housing market insights, and strategic guidance can make all the difference in achieving long-term success.
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Is It True That There Are Too Many Real Estate Agents In The US?
The number of licensed real estate professionals in the United States has reached historic highs. The National Association of Realtors (NAR) reports around 1.55 million members, but when you include licensed real estate agents who are not NAR members, the total reaches nearly 2 million. This means there are more agents than ever before competing for a limited number of transactions.
In 2025, approximately 4.2 million home sales are projected across the country. That equates to more than two real estate agents for every home sold, a ratio that raises concerns about sustainability and earning potential for those in the field. Adding to the complexity, there are over 106,000 brokerages nationwide, averaging 14.6 agents per office, according to Ruby Home. These figures paint a picture of a highly fragmented and saturated industry.
States like Florida (225,563 agents), California (204,687), and Texas (150,141) have the highest concentration of real estate professionals. While all Realtors are licensed agents, not all licensed agents are Realtors, and the professional standards and experience levels vary widely across the board.
Industry experts have started to question whether the low entry barriers are contributing to an excess of underprepared agents. Stephen Brobeck from the Consumer Federation of America notes that many companies sponsor real estate agents with minimal training or real-world experience. He encourages buyers and sellers to evaluate agents based on past performance and client reviews, not just a license.
The surge in real estate activity after the pandemic attracted many people to the field, especially as home values climbed and commissions grew. However, in today’s market, where mortgage rates remain high and inventory is tighter, many of those agents are struggling to close deals. In 2023, it was estimated that there were 2.4 Realtors for every home sold, and that ratio is likely even higher in 2025.
Part of the challenge is that becoming a real estate agent is relatively simple. Most states require only a few hundred dollars in fees, a few weeks of coursework, and a passing score on a multiple-choice test. Bret Weinstein, a seasoned broker in Denver, has pointed out that appraisers require significantly more education and oversight than agents, despite the critical role both play in home transactions. This imbalance is contributing to a wide range of competence levels in the industry.
Why Has The Industry Become Oversaturated With Real Estate Agents?
There are several reasons behind the growing number of real estate agents, and it’s a combination of financial incentives, cultural perception, and structural ease of entry that has fueled the trend. Here are the most common contributors:
1. Low Barrier to Entry
In most states, becoming a real estate agent is fast and affordable. Self-paced online courses can cost under $100, and the required education can be completed in just a few weeks. This minimal investment attracts a wide range of people, even those without prior sales or real estate experience. In comparison, appraisers must complete months of education and fieldwork before they are certified, despite holding a similarly important role in transactions.
2. Pandemic Boom and Rising Home Prices
The housing boom that followed the pandemic brought a flood of interest into the real estate profession. With prices rising and homes selling quickly, many saw real estate as a path to strong earnings with relatively low risk. The rapid growth in values meant higher commissions, which pulled even more people into the field. That surge has slowed in 2025, but the number of active agents has not declined at the same pace.
3. Job Flexibility
Real estate is often seen as a flexible career path, which appeals to people looking to break away from traditional office jobs. The idea of setting your own schedule and working independently is attractive, especially for those juggling family or other responsibilities. However, that perception doesn’t always match reality. Success for practicing real estate agents requires constant networking, prospecting, and weekend availability. Many find that the job demands far more time and energy than expected.
4. Promise of Large Commission Checks
The potential earnings continue to be a major draw. Agents typically earn between 5 and 6% of the home sale price, split between the buyer’s and seller’s agents, and then further split with their brokerages. On a $1 million home, this might result in a commission of $12,000 to $15,000 for each agent after all splits. While the numbers sound promising, landing those deals is increasingly competitive. For many new agents, the promise of big payouts does not match the actual income they earn in their first few years.
5. Glamorized Career Image
TV shows and social media influencers have glamorized real estate as a fast-paced, luxurious lifestyle filled with million-dollar homes and quick closings. This has led many people to pursue a license with unrealistic expectations. The result is an industry crowded with part-time, untrained, or underqualified agents that sometimes aren’t fully practicing real estate agents. Even the NAR has acknowledged in past reports that this oversupply can reduce the professionalism and reliability of the industry as a whole.
Stats Which Demonstrate How Bad This Issue Really Is
The ease of becoming a real estate agent is one of the key contributors to the growing imbalance in the industry. In Texas, for example, becoming a real estate agent requires 180 hours of coursework but no supervised experience before taking the licensing exam. By comparison, real estate appraisers in Texas must complete 150 hours of education plus 1,000 hours of supervised experience before they are eligible for licensing. This pattern of lower entry barriers for agents is common in other states as well. In Massachusetts and Michigan, prospective agents need just 40 hours of education to qualify for the exam, creating a system where entering the industry is quick, affordable, and relatively unregulated.
Recent membership figures from the National Association of Realtors (NAR) further illustrate the problem. As of early 2025, NAR membership stands at approximately 1.6 million agents, according to Ruby Home. This equates to roughly 2.4 Realtors for every home actively listed for sale across the United States. The headcount has remained near record highs, even though home sales volume has declined significantly from pandemic-era peaks. Since the start of the pandemic, the NAR has added close to 200,000 new members, fuelling even greater competition for a shrinking number of transactions.
Although entering the real estate field is relatively easy, staying in the business and earning a sustainable income is much more difficult. According to NAR’s most recent Member Profile Report, Realtors with less than two years of experience earned a median gross income of only $10,100 in 2024. In contrast, agents with 16 years or more of experience reported a median gross income of $82,500, highlighting a massive gap in earnings based on tenure. Furthermore, roughly one-third of active Realtors in 2024 had been in the business for five years or less, indicating that a large portion of the workforce remains relatively inexperienced.
These figures highlight the growing divide between seasoned professionals who have built successful real estate careers and a large number of marginal agents who struggle to gain a foothold. Many of these marginal agents complete five or fewer sales annually, contributing to a workforce that is bloated but not always productive.
Will The Market Self-Correct Or Is This Issue Here To Stay?
The question of whether the real estate market will naturally rebalance itself remains a topic of active debate. On one hand, the entrepreneurial spirit that draws people into the industry continues to thrive. On the other, concerns about maintaining consistent service quality are becoming harder to ignore. For now, the oversupply of real estate agents persists, and it is unclear whether market forces alone will be enough to correct the imbalance.
Several potential solutions have been discussed across the industry to help address this challenge. Introducing more robust education and training requirements is one idea that frequently surfaces. Strengthening the initial licensing process by requiring agents to complete longer coursework, pass more rigorous examinations, or participate in mentorship programs could help filter in more qualified professionals. Another suggestion is to establish additional ongoing education standards to maintain a license, ensuring that agents stay up to date with market conditions, legal changes, and ethical practices.
Some experts have also proposed a probationary or supervised period for new agents before they are allowed to operate independently. This approach could give new entrants valuable real-world experience while minimizing risks for consumers. Lastly, rethinking the commission structure has been floated as a way to improve long-term retention. For example, introducing a tiered commission system where inexperienced agents earn a smaller share initially could encourage them to remain in the industry longer and build sustainable careers, rather than chasing quick commissions and exiting after a few difficult transactions.
Tips For Finding Investor-Friendly Agents With Strong Track Records
Working with the right real estate agent can be a game-changer for investors. Investor-friendly agents do more than understand the local market. They focus on strategies that maximize returns and uncover opportunities others miss. Here’s what sets them apart:
Access to Off-Market Deals
Top agents find hidden opportunities through private networks, direct owner relationships, and wholesalers, giving investors an edge in competitive markets.
Micro-Market Expertise
Investor-focused agents specialize in specific neighborhoods, offering insights into rental demand, zoning changes, and development trends that impact investment decisions.
Personal Investment Experience
Agents who have invested themselves understand the importance of cash flow, ROI, and long-term growth, providing practical advice from an investor’s perspective.
Full-Time Dedication
Full-time agents bring better market insights and faster execution, which is critical when timing can make or break a deal.
A Strong Professional Network
Experienced agents have relationships with contractors, lenders, attorneys, and property managers, helping investors move quickly and efficiently.
Understanding Investor Language
An investor-savvy agent knows terms like cap rates, ARV, and cash-on-cash returns, ensuring communication is clear and strategy-focused.
Focus on High-ROI Renovations
The best agents help identify smart, cost-effective renovations that boost property value without overspending.
A Long-Term Partnership
Beyond closing a deal, strong agents act as partners, keeping investors informed about new opportunities and market shifts over time in the real estate industry.
*Resources
NAR | Ruby Home | Bigger Pockets | Realtor.com | Bankrate | Entrepreneur | CFA
