How Big is The Real Estate Industry?

How Big Is the Real Estate Industry?

The real estate industry is big. According to federal statistics, the industry contributed more than $2.7 trillion to the U.S. economy in 2018 or about 13 percent of GDP. It employed more than 2 million people and generated more $10 billion in corporate profits.

So, yeah, the real estate industry is really big

For comparison, farming employs about 800,000 people and contributes less than one percent to GDP.

Let’s go over some background.

What Is the Real Estate Industry?

The real estate industry is the economic sector focused on buying, selling, renting, leasing, and managing real estate. It includes all brokers, agents, property managers, rental clerks, and appraisers in the U.S.

The real estate is important to the U.S. economy because it relates to so many other sectors. Most U.S. companies require a physical office or factory space to conduct their business. The value of that property and the cost to occupy it depends, in part, on the real estate industry.

Many homeowners are families, so the real estate also has strong ties to individual and family wealth. As real estate values and rental costs change, so too does family prosperity.

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How Does the Real Estate Industry Generate Income?

The real estate industry generates income because the value of real estate tends to rise. As a result, people are able to make money buying, selling, and renting real estate. Whenever an individual sells a piece of property for more than its purchase price—or rents it for more than it costs to maintain—profits are realized. Investments in buildings and structures also increase the productivity of real estate, which contributes to the industry’s economic output.

What Role Do Agents and Brokers Play?

Agents and brokers capture a portion of the profits by selling a service to those engaged in a real estate transaction. Buying or selling real estate is risky. For many families and companies, real estate makes up a large part of their assets. By ensuring a fair and efficient transaction, real estate agents and brokers take some of the risk out of the transaction. They are compensated for this, usually in the form of a commission.  

Let’s conclude. The real estate industry is big and profitable. Agents contribute to this profitability by helping facilitate property transactions.

Questions or feedback? Leave them in the comments. For more real estate resources, see our List of Universities That Offer a Degree in Real Estate. 

Note: Economic figures come from the Bureau of Economic Analysis. Corporate profits are before tax.


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The opinions or information expressed in this article are those of the author and do not necessarily reflect the official views, policy, or position of Realtyna. The information on Realtyna’s Website is general, for informational purposes only, and is not to be relied upon or interpreted as real estate, legal, accounting, or other professional advice or a substitute. Please discuss anything related to the certification process, professional advice or legal procedures with your MLS providers.

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