The recent analysis highlighting the stark disparity between the cost of homeownership and renting should serve as a wake-up call for MLS executives and their member agents. Homeownership has long been synonymous with the American Dream, but in today’s economic climate, that dream is increasingly out of reach for many. Mortgage rates hovering near two-decade highs and persistently high home prices have made the cost of owning a home prohibitive, even for well-qualified buyers. Renting, meanwhile, has emerged as a more financially viable—if not necessarily ideal—option for many.
This presents an enormous opportunity for MLS organizations. Members need the right data, tools, and strategies to navigate this shift effectively and to better serve their clients, whether those clients are aspiring homeowners or tenants exploring their options.
The growing rental market isn't just a necessity for consumers—it’s also an enormous untapped revenue opportunity for real estate professionals. Consider this: with the average broker fee for a rental equivalent to one month's rent (especially in a “post-settlement” world), the potential for annual commissions in the rental market is staggering.
According to recent statistics:
Roughly 40% of renters transition to new leases annually resulting in 17.6 million rental transactions. At an average commission of one month’s rent, the total potential broker fees is $35 billion annually.
Now imagine if MLS systems were optimized to capture even a fraction of this rental activity. By expanding rental inventory and tools, agents could seamlessly pivot between serving buyers and renters, unlocking additional income streams while maintaining strong client relationships.
Rental commissions represent an often-overlooked avenue for growth that can bolster agents’ incomes during challenging homebuying markets and adapt to recent commission changes that are causing many to reconsider their future plans. For MLS organizations, prioritizing rentals by:
Beyond the immediate revenue potential of rental commissions, engaging with renters creates a pipeline of future homebuyers. Data suggests that at least 20% of renters eventually transition into homeownership. By building relationships during their rental phase, agents can position themselves to assist when renters are ready to buy, unlocking even greater commission potential.
Let’s calculate the opportunity:
If agents capture these transitions through rental relationships, that’s 8,800,000 transactions, resulting in:
$88 billion in buyer-agent commissions annually.
When combined with the $35 billion in potential rental commissions, we’re looking at an annual revenue opportunity of $123 billion for real estate professionals—if they are equipped to navigate both the rental and homebuying markets.
Agents are increasingly working with clients who are pivoting to renting as a stopgap solution. MLS system should reflect this reality by offering comprehensive, accurate rental data. Many MLS platforms are still geared primarily toward home sales, leaving rental markets underserved. Enhancing MLS systems to include detailed rental inventory, pricing trends, and lease terms will empower agents to meet the needs of today’s renters and landlords.
Additionally, MLS organizations should invest in tools that enable agents to help their clients analyze rent vs. buy scenarios based on individual financial circumstances. By becoming a trusted advisor in both markets, agents can remain relevant and valuable, regardless of a client’s immediate buying ability.
The desire for homeownership remains strong, even among those priced out of the market. Many first-time buyers now consider investment properties as their initial purchase, turning their dream of ownership into reality sooner while building long-term wealth. To support this trend, agents must be equipped and trained to guide buyers with the rental and investment potential in mind. This is where MLS organizations can step in to support agents in developing strategies for these clients:
The rental market isn’t just a temporary solution for clients; it’s a strategic entry point to forge long-term relationships. By incorporating robust rental tools and data into MLS systems, we empower agents to serve renters today while positioning themselves for tomorrow’s sales opportunities. This dual revenue stream supports agents’ financial stability and strengthens the overall value proposition of MLS membership.
Rental transactions aren’t just a means to survive a tough housing market—they’re a critical gateway to future homebuying success. MLS leaders who prioritize rentals now will secure a competitive edge, ensuring their members thrive in the short and long term.
As the cost of owning a home continues to outpace renting, MLS executives should take the lead in empowering agents with the data, tools, and insights needed to navigate this landscape. By prioritizing rentals in MLS systems, supporting clients on their journey to eventual homeownership, and advocating for long-term solutions, MLS organizations can ensure their members are equipped to thrive in today’s challenging market—and, more importantly, to help their clients do the same.
Are you interested in learning more about Rental Beast and how we can help your MLS? Contact us here.
