Real Estate Appraisers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 13,000 real estate appraisers in the US estimate the fair market value of land and buildings, typically before properties are sold, mortgaged, taxed, insured, or developed. Large firms may offer related services, such as information or closing services. Independent appraisers may serve as expert witnesses.
Vulnerability to Trends in Housing Market
A key driver of financial performance in the real estate appraisal industry is the US housing market, which is sensitive to changes in economic conditions.
Competition from Alternative Valuation Models
Alternative valuation models (AVM), which are computerized models used by mortgage originators and secondary market issuers to determine property value, pose a significant threat to real estate appraisers.
Industry size & Structure
The average real estate appraiser employs 2-3 workers and generates about $638,000 annually.
- The real estate appraisal industry consists of about 13,000 firms that employ 36,000 workers and generate $8.3 billion annually.
- The industry is fragmented; the top 50 companies account for 40% of industry revenue.
- About 39% of establishments generate between $100,000 and $249,999 annually; 23% generate less than $100,000 annually; and 20% generate between $250,000 and $499,999 annually.
- Large appraisal management companies (AMC) include CoreLogic, Solidifi, and TSI Appraisal.
- Nearly 42% of appraisers are employees within a firm and 46% are sole proprietors without employees, according to the Appraisal Institute.
Industry Forecast
Real Estate Appraisers Industry Growth
Recent Developments
Nov 18, 2024 - US Housing Market to Improve in 2025 and 2026
- After two years of high interest rates and home prices hindering home sales, the US housing market is expected to improve in 2025 and 2026, according to a November forecast by National Association of Realtors chief economist Lawrence Yun. Existing home sales are expected to rise 9% year-over-year in 2025 and then climb 13% in 2026. New home sales are forecast to increase by 11% in 2025 and 8% in 2026. Key demand drivers include a healthy labor market and population growth. The average 30-year fixed-rate mortgage over the past 52 weeks has ranged between 6.08% and 7.44%, according to Freddie Mac. Yun says he believes mortgage rates will be near the bottom end of that range in 2025 and 2026.
- Older Americans’ preference for aging in place is expected to tighten the US housing market over the next decade, according to a recent report by the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA). The homeownership rate among Americans over 70 has been rising since 2015; this, combined with the size of the Baby Boom generation, is leading to larger numbers of existing homes staying off the market. The report does not expect an excess supply of existing homes to come to market over the next decade due to older Americans moving or dying. Aging homeowners staying in their homes longer could boost demand for new homes if the existing home market remains tight.
- Recent cuts to the benchmark rate by the Federal Reserve have yet to translate to lower mortgage rates for home buyers, according to The Wall Street Journal. A Fed rate cut of a quarter-percentage point in early November followed a half-point cut in September. However, for the week ended November 14, the average rate for a 30-year fixed-rate mortgage was 6.78%, down just 0.01 points from the prior week and only 0.66 points from a year earlier. Rather than being set by the Fed, mortgage rates are heavily affected by the 10-year Treasury yield. Treasuries tend to rise amid positive economic outlooks, and a rosy view of the current economy is keeping treasuries and mortgages high. Donald Trump's retaking of the White House pushed treasuries higher as some investors believed his tax-cutting plans would increase the deficit and contribute to inflation. Stubbornly high mortgage rates have stalled a rebound in home sales, which are a key demand driver for real estate appraisals.
- In July, the US Department of Housing and Urban Development (HUD) reached an agreement with The Appraisal Foundation (TAF), an organization that sets standards and qualifications for real estate appraisers. The agreement stems from a HUD complaint and subsequent investigation that began in late 2021, which alleged that some of TAF’s policies may have led to disparities of opportunity in the appraisal industry. According to US Bureau of Labor Statistics 2023 data, nearly 95% of property appraisers are white. HUD alleged that a TAF licensure policy that relied heavily on an already-licensed friend or family member to supervise on-the-job training hours may contribute to a lack of diversity. Under the agreement, TAF will create a $1.22 million scholarship fund to pay for new appraisers to receive training. During the HUD investigation and before it, TAF took steps to address diversity, and the July agreement came with no official findings.
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