Real Estate, Rental, and Leasing Sector Trends
The real estate industry’s high profit margin makes it a lucrative sector for a new company. However, current business trends suggest that the COVID-19 pandemic’s effects on the economy and remote work has significantly altered the real estate industry as a whole.
Key market indicators ensure that this industry is stable and meant to last, but urban flight (i.e., the process of moving from cities to more rural areas) and the hot homeownership market of recent years has introduced volatility, indicating that the real estate sector’s revenue will likely decline in the coming years.
Recommended: Visit our Business Trends page to explore interactive data for other industries.
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Key Sector Indicators
Market Revenue: $1.2 Trillion
Profit: $571.4 Billion
Profit Margin: 48.9%
Number of Businesses: 4 Million
Employment: 5 Million
Current Sector Trends
Economic indicators measure the economic health of a sector. Understanding where a sector is as well as its future projection is crucial for creating effective business strategies and maintaining profit margins. Check out these economic indicators identified by the Census Bureau:
- New Residential Construction: The number of privately-owned buildings authorization to be built and in the process of being built
- New Residential Sales: The sales of new, single-family homes
- Rental Vacancy Rate: This is the percentage of rental property that is unoccupied. High rental vacancy rates are associated with low demand, while low rates indicate too little supply of rentals.
- Homeownership Rate: The percentage of homes occupied by the homeowner.
New Residential Construction
Privately-owned housing starts in September 2021 were at a seasonally adjusted annual rate of 1,555,000. This is 1.6 percent (+/- 11.4%)* below the revised August 2021 estimate of 1,580,000.
New Residential Sales
Sales of new single-family houses in August 2021 were at a seasonally adjusted annual rate of 740,000. This is 1.5 percent (+/- 15.1%)* above the revised July 2021 estimate of 729,000.
Rental Vacancy Rate
2nd Qtr 2021
2nd Qtr 2020
The rental vacancy rate in the second quarter 2021, 6.2 percent, was higher than the rate in the second quarter 2020. The rates in the Northeast and West were higher than their second quarter 2020 rates. The rates in the Midwest and South were not statistically different from the second quarter 2020 rates.
2nd Qtr 2021
2nd Qtr 2020
The homeownership rate in the second quarter 2021, 65.4 percent, was lower than the rate in the second quarter 2020. The homeownership rates in the Northeast, South, and West were lower than the rates in the second quarter 2020, while the rate in the Midwest was not statistically different.
Real Estate Sector Revenue Trend
Market revenue is an important key indicator for understanding how much money is coming into a sector. The following graph shows the utility industry’s profit revenue since 2013. Additionally, a projection for the sector’s future revenue through 2026 is given.
Hover over the graph to see the sector’s total revenue for a particular year.
(This graph is interactive!)
Major Players and Industry Competition
The major players in this industry make up less than 2% of the industry’s total market. This suggests that new small businesses are able to be competitive since there is not a large monopoly in this sector.
(These graphs are interactive!)