Brokerages Staffed Up When Home Sales Hit Six Million a Year – Volume Has Been Stuck at Four Million Since

Written by:

Alejandra Rodriguez

Date:

26 Aug 2026

Share

Share via Facebook

Share via Linkedin

Share via X

Copy to clipboard

The U.S. residential market has been stuck at roughly 4.1 million annualized transactions for four consecutive years, according to Craig McClelland, a partner at McClelland & Hahn Consulting who advises enterprise-scale real estate, proptech, and fintech companies on structural business changes. That figure becomes a structural problem when measured against the infrastructure many brokerages erected during the 2020–2021 surge, when the market hit 6 million units, and firms expanded staff, offices, and technology budgets to match. The gap between what was built and what the market now supports is where margin compression turns existential.

McClelland describes an industry where the hangover from that expansion remains unresolved. Firms brought on staff, opened offices, and built infrastructure because cash was readily available, agents were closing transactions at higher prices, commissions rose accordingly, and PPP loans padded the balance sheet. The correction has been slow rather than sharp. “We didn’t have a hard landing; we have a soft landing,” McClelland says. “But soft landings take a very long time.”

The Self-Created Margin Problem

The current squeeze didn’t start with rates or inventory. McClelland traces it to a two-decade drift in which brokerages abandoned specialization for headcount. Rather than investing in tools and services tailored to a specific type of business, many firms prioritized agent count above all else. “They said it’s not about the quality of the agent or the tools to support the type of business they’re doing,” McClelland says. “We’re just going to hire everybody and kind of support everybody a little bit.”

The trade-off was predictable: to attract agents, brokerages gave away commissions. With no commission revenue left to fund operations, technology budgets shrank, and service quality dropped. Firms that once paid $17 per agent for transaction management software began seeking $7 alternatives. McClelland frames the core problem directly: “You can’t charge good money for basic services.”

The firms that avoided this cycle chose a lane early: luxury, a specific asset type, a defined geographic market, and stayed in it. “The ones that fail miserably are the ones that try to do everything,” he says. “They try to facilitate every transaction, and they’re just not that good at any of them.” Meanwhile, agents who are focused on a specific lane are picking up a bigger share of that market segment.

Why AI Won’t Rescue Without Strategy

Brokerages have latched onto AI as a margin recovery tool, but McClelland sees most adopting it superficially. “They’re leveraging AI in a very surface way in their operations, and that won’t play out well over time,” he says.

His view is that AI will compress the middle of the agent population rather than eliminate it wholesale. Agents already performing well and willing to push the tool’s capabilities will gain further advantage. Mediocre performers will face increasing pressure to leave, or at least to stop producing. “AI will raise the floor as to who will be able to stay in this business, which is good,” McClelland says. “And then AI will also raise the ceiling on how successful people can be.”

But the common prediction that hundreds of thousands of agents will exit the business misunderstands the economics of licensure. In Georgia, McClelland points out, an agent can maintain an active license for roughly $500–$600 a year, MLS access at $20 a month, a brokerage seat for $149 annually, and a renewal fee. “For someone to say, ‘Can I justify that in case maybe I sell my cousin’s house?’, of course you can,” he says.

The industry currently holds about 2.3 million licensees against roughly 1.4 million NAR members, a gap that reflects how many agents maintain a license without meaningful production. The first sign of market stress is agents dropping NAR membership, not surrendering licenses. That distinction matters for anyone forecasting agent attrition: the population will shrink in activity before it shrinks in number.

The Mortgage-Brokerage Convergence

One structural shift McClelland is watching is the movement of large mortgage operations into brokerage. He points to Rocket and others as examples of a pattern he expects to continue. The old model, a large real estate operation running a small in-house mortgage desk, is inverting. “Now it’s becoming a large mortgage operation, a large real estate operation coming together to successfully support a client in a different way,” McClelland says.

No Silver Bullet Ahead

McClelland sees no near-term catalyst for a return to higher transaction volumes. Rates remain in the six-to-seven-percent range, and he notes the Fed may execute only one cut this year, if that. Geopolitical uncertainty around oil prices and conflict adds consumer hesitation without triggering a downturn that would force intervention.

Many brokerage leaders, he says, were bullish on the new administration delivering economic relief, but “it’s more complicated than people realized.” The result is an industry where confidence is “rightfully in check,” not negative, but no longer expecting rescue. “The smart ones are going to reshape their operations,” McClelland says, “and the other ones are just going to keep on running like they’ve been running, hoping, wishing and praying it’ll come back in a couple of years.”

For brokerage owners still carrying the overhead of the 2020–2021 expansion, McClelland’s assessment is direct: stop waiting for transaction volume to return to six million. “It may last another four years,” he says. “We’ll see.”

About the Expert: Craig McClelland is a partner at McClelland & Hahn Consulting, advising enterprise-scale real estate, proptech, and fintech companies on structural business changes.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.