MarketWatch
The Realtor® commissions debate has turned up a notch with the Biden administration weighing in.
The White House stated in a fact sheet that part of the reason why home prices are so high is due to limited competition in the housing industry. It also singled out a landmark settlement between the National Association of Realtors® and several home sellers as an “important step” towards boosting competition in the market.
The NAR pushed back against the implication that commissions were partly to blame for how unaffordable home-buying has become.
After all, the NAR argued, Realtor® commissions have always been flexible and sellers have always had the potential to offer $0.
Here’s what the NAR’s president, Kevin Sears, said: “While the National Association of REALTORS® appreciates President Biden’s continued focus on the affordable housing crisis, the President unfortunately repeated incorrect claims that the recently announced settlement agreement allows Americans to negotiate commissions for the first time.”
“Real estate agent commissions are driven by the market and are not the cause of the affordability crisis,” he added.
But “commissions were already negotiable before this resolution was reached and will continue to be negotiable as they have been,” Sears said.
Instead, the Realtors® argued, the focus should be on the lack of inventory of home listings across the nation.
To be sure, lack of inventory is indeed one of the biggest reasons why home prices continue to rise despite mortgage rates hovering near 7%. As buyer demand outpaces supply, home prices continue to rise.
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