This article is part of a larger series on How to Become a Real Estate Agent.
As a real estate agent, you can control your own success—but you can’t control your local market. The state you live in will impact your income and overall success. To help you understand the different challenges you’ll face in each state, we evaluated things like cost of living and earning potential in all 50 states.
Click here for a complete summary of the data we considered as part of this study.
Top 10 States to Be a Real Estate Agent
Wyoming ranked No. 1 on our list due to being in the top 10 for four out of the five factors: agent competition, agent salary, homeownership, and cost of living. This state boasts an annual median wage of $71,460 and 71.9% of owner-occupied homes in the state. In addition, the overall cost of living in the state is the 10th lowest of all the states.
Although Wyoming didn’t perform well for median home value (23rd on the list), there are fewer agents in Wyoming than in many states, ranking it eighth on our list for agent competition. Plus, Wyoming has some of the lowest taxes in the country and has a large volume of undeveloped land, making it attractive for homebuyers who want to build a home on acreage.
Michigan ranks high on our list of the best states to be a real estate agent because of low agent competition (fourth on our list) and a high percentage of owner-occupied homes (71.6%, making it fifth on our list). The state also boasts an extremely low overall cost of living—seventh on our list.
Despite ranking highly for several criteria, the overall median home value in Michigan is low compared to other states at $154,900 (41st), which has decreased in the last two years. Agent salaries are also lower than in other parts of the country, with annual median salaries around $57,170 (23rd on our list). However, the low cost of living makes up for this, allowing Michigan to rank No. 2 on our list; it’s a great option for new agents who want to keep expenses low while building their business.
3. West Virginia
At third on our list, West Virginia is a great option for real estate agents primarily because of the high percentage of owner-occupied homes (73.4%, which is the highest percentage of all states). Agents in the state also face less competition than agents in other states (11th overall). However, West Virginia is ranked 50th out of 51 states for home value, with a median of $119,000. This impacts the median agent salary, which has decreased to $56,880 per year.
West Virginia’s appeal for agents is rounded out by the overall cost of living in the state (17th overall). Plus, while not a criterion considered in our rankings, West Virginia also shares license reciprocity with 12 states and Puerto Rico. This makes the state a great option for agents who want to sell real estate in multiple states ranging from Georgia, to Alabama, to Massachusetts.
Vermont offers an excellent environment for real estate agents primarily because of a low rate of agent competition—first on our list. The state also boasts a relatively high percentage of owner-occupied homes (70.9% and 8th on our list), so there is notable opportunity to become a successful buyer or seller agent.
Vermont also ranks slightly above average for median home value (20th). In spite of these favorable factors, Vermont has among the highest costs of living in the United States, ranking 39th on our list for the metric. In recent years, the median agent salary has decreased as well, so it ranks 29th. This combination of characteristics makes the state a great fit for established agents who can afford the high cost of living while continuing to build their business without strong competition and with high home values.
5. New Hampshire
New Hampshire is a good option for real estate agents because of the state’s low agent competition (third on our list) and its high percentage of owner-occupied homes (seventh). The state also has a median home value higher than more than two-thirds of the states, at $261,700.
However, New Hampshire has a high cost of living compared to other states (37th on our list) and a notably low overall salary (43rd). This can make it a difficult environment for new agents. However, the Granite State is known for its natural beauty and the recent influx of high-tech industries, which make it a huge draw for new homebuyers and, therefore, real estate agents.
One of the few Western states in the top 10, Utah is among the best states to be a real estate agent because of the higher percentage of owner-occupied homes (70.6% and ninth on our list). The state also ranks well because of the high median home value (11th at $279,100), which increases agent salaries (sixth).
Utah does, however, have more agent competition than most of the other states, ranking 38th on our list. Even so, the state’s average cost of living (27th) makes it a great place to start or build a real estate career. Plus, the state is expected to double its population by 2065, which will have a huge impact on the local housing market—especially for agents who specialize in new development.
Iowa ranks seventh on our list because of the high percentage of owner-occupied homes (70.5% at 10th on our list) plus low cost of living (13th). Although agent competition has increased slightly (18th), it’s easier to establish and sustain a successful real estate career in Iowa than in the majority of states.
Consistent with the state’s low cost of living, however, the average agent salary in Iowa is lower than half of the other states, at about $54,610. The state ranked 43rd on our list for median home value, with a median home value of $147,800. However, the Iowa Association of Realtors’ housing stats reveal that median sale prices increased by 7.1% in 2020.
Tied for seventh, Maine offers real estate agents excellent career opportunities largely due to the high percentage of owner-occupied homes (72.2% and second on the list). The state also ranks better than over half the states for agent competition (19th). This combination of rankings makes the state a great option for new agents because there is only a moderate barrier to entry.
However, the median home value in Maine is $190,400, making it just below average on our list. That impacts overall agent salary, which decreased to the 28th spot in rankings. What’s more, the overall cost of living is quite high (40th on our list), so agents will be best served if they choose a submarket with higher property values than the state average. For example, consider focusing on a coastal area like York, Rockport, or Bar Harbor, where you can manage vacation rentals or represent buyers and sellers of second homes.
Mississippi ranks in the overall top 10 best states to live in primarily because of its low cost of living—number 1 on our list. There is also a relatively low amount of agent competition (15th) and homeownership rates (67.3%, which ranks 19th). These factors make it an ideal location for agents to start and establish a real estate career.
However, the state with the lowest cost of living also has the lowest median home value at only $119,000. Surprisingly, even with low home values, Mississippi real estate agents make it into the top half of states with a median agent salary of $57,030 (24th). Although the low home values result in lower commissions from each transaction, the homeownership rates and low competition allow agents to make more transactions.
10. South Dakota
South Dakota rounds out the top 10 best states for real estate agents, but interestingly does not rank in the top 10 for any of the five criteria. It beats out other states because of the balance between low agent competition (13th), agent salary (16th), and owner-occupied homes (18th).
Homes in South Dakota have a low value, at an average of only $167,100 and in 36th place. However, even with low home values and a moderate cost of living (29th), real estate agents can make more sales because of low competition.
Biggest Gains & Losses
While Wyoming and Michigan held on to their spots as the two best states to be a real estate agent, many other states’ rankings changed notably.
Montana moved up 17 rankings primarily because of a significant improvement in agent salary (from 41st all the way to 11th). Louisiana also moved up 15 ranks because of changes in agent salary and owner-occupied homes, even though the individual rankings for agent competition and cost of living decreased slightly.
Both Kentucky (from 48 to 34) and Kansas (from 36 to 24) saw the biggest improvements in agent competition and agent salary, which led to significant improvements in their overall rankings. On the other hand, Indiana moved up rankings significantly even though many of their individual criteria rankings did not change significantly.
One of the top 10 states in 2019, Alaska, plummeted all the way to 24th after losing some points for agent competitiveness and agent salary. Similarly, North Carolina previously ranked 22nd for agent salary, but dropped to 42nd with a median of only $62,570. They also lost ranking spots in almost every other category, which caused their overall rankings to fall 16 spots.
Interestingly, the three remaining losses came from states that had very minimal changes in individual rankings. New York and Hawaii continue to rank number one for agent salary and home value, respectively. In California, the only ranking that dipped slightly was agent salary, but it still caused the state to plummet from 18 to 32. The losses in these three states were mostly because of improved rankings from others.
To determine the best states to be a real estate agent, we examined factors that indicate an area’s strengths and weaknesses for new and existing real estate agents in terms of earning potential. We also looked for areas with opportunity for growth as well as potential threats to success.
In particular, we evaluated the following six key metrics:
- Agent salary
- Cost of living
- Home values
- Homeownership rate
- Number of owner-occupied homes
- Agent competition
Each of the categories was given equal weight based on the importance of each metric to the real estate profession. We then averaged the rankings for each state to obtain an overall ranking.
To evaluate states based on real estate agent earning capacity, we ranked each for annual median real estate agent salary and annual mean real estate agent salary. These data were calculated by the Bureau of Labor Statistics (BLS) based on “year-round, full-time” hours and reported survey data from real estate agents.
Cost of Living
We included cost of living in our rankings to adjust for average agent salaries in each state. Cost of living information was obtained from the World Population Review and represents data from 2020.
Median Home Value
We obtained median home value data for 2020 from the United States Census Bureau. This metric represents the median value of homes in each state. In addition to being an indicator for real estate agent commission potential, the average home value also reflects the overall health of a state’s housing market and its economy in general.
Homeownership rates were also taken from the 2020 U.S. Census Bureau data, which reflects the percentage of adults in the state who own a home. Typically, states with a lower cost of living will have a higher percentage of homeownership and rank higher among all states.
The percentage of homes that are owner-occupied represents how prevalent homeownership is in each state. Higher rates of owner-occupied homes demonstrate a higher likelihood of homeownership in the future, which suggests opportunities for new construction, new listings, and increased need for buyer’s agents. Data was compiled by the U.S. Census Bureau in 2020.
We measured real estate agent competition based on Bureau of Labor Statistics (BLS) data about the number of real estate agents per 1,000 workforce members in each state. This data point is a single number representing the ratio of agents in each state to the national average. States with fewer agents and a lower location quotient were ranked higher in this study because it shows there is less competition.
Curious how your state ranks per each of these criteria? Select a state below and find out how it ranks:
Choosing a state with a healthy real estate market and low cost of living can have a substantial impact on the success of your career as an agent. If you’re contemplating a move, check out Western states like Wyoming, Midwestern states like Iowa, Michigan, and South Dakota, or Northeastern states like Vermont, New Hampshire, and Maine.
No matter which state you choose, Real Estate Express can help you meet the state’s licensing requirements and take the courses necessary to earn your license. In addition to offering prelicensing courses, they provide a range of continuing education courses to help maintain your license. Click here to learn more.