Mar 15, 2024 - Economy

Housing market jolt

Illustration of a for sale sign with an upward trending line instead of the sign.

Illustration: Aïda Amer/Axios

The business of buying and selling homes in the U.S. just received a titanic jolt, Axios' Pete Gannon writes.

The big picture: The National Association of Realtors, as part of a wider settlement agreement to end a series of lawsuits from home sellers, agreed to end its rules that essentially guaranteed agents' 5%–6% commissions on home sales.

While a federal court still has to approve the deal, experts across the industry have not held back on predictions of its impact:

Case in point: Shares of online real estate companies plummeted on today's news, with Zillow, Redfin and Anywhere Real Estate closing down 13%, 5% and 12%, respectively.

  • Such companies rely in part on partnerships with real estate agents, whose marketing budgets could wind up being reduced with a drop in agent commissions.
  • Americans could end up spending $30 billion less in commissions, annually, due to the competition forces unleashed by the changes, analysts at Keefe, Bruyette & Woods predicted last year.

Changes to the industry are coming. "You'll see some new pricing models, and some new and creative ways to provide services to home buyers," Benjamin Brown, co-chair of Cohen Milstein's antitrust practice who worked on the settlement, told the New York Times.

  • "It'll be a really exciting time for the industry."
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This story was an excerpt from Axios Closer, a recap on the day's biggest business stories.

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