Real Estate Agents Target Record $100 Billion as Home Sales Boom
(Bloomberg) -- The hot U.S. housing market is poised to deliver a banner year for real estate agents.
Commission revenue -- the cut that brokers collect for helping buy and sell homes -- is on track to surge 16% in 2021, surpassing $100 billion for the first time, according to a new analysis by Knock, a property-technology company that lends customers money to buy a new home while helping them sell their old one.
The increase comes despite a slight dip in the rate that agents are charging customers. In 2021, the average commission rate is expected to be 4.94% -- 20 basis points lower than two decades ago, according to Knock.
Real estate agents have remained the dominant way to buy and sell homes in the U.S., even as companies promising to streamline the process with technology have proliferated. As home prices soar across the U.S., that’s led to a surge in revenue for the real estate brokers, who typically take a cut of every transaction.
While the increase in fees is boon for agents, it puts a spotlight on a revenue model that has drawn scrutiny. Earlier this month, the U.S. Justice Department pulled out of an antitrust settlement reached during the Trump administration with the National Association of Realtors, saying it intends to proceed with a probe of the organization.
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