Barring a complete (and unrealistic) halt to the national real estate market, the second half of 2021 is likely to tie, if not break, records when it comes to agent commissions.
Real estate technology company Knock has put forth a big projection in anticipation that total realtor commissions for the year will come in at $104 billion. Should that threshold be crossed, it will be the most profitable year in U.S. real estate history.
Such a feat would only make sense following a year where homes flew off the market for hundreds of thousands of dollars over asking across markets large and small. Though the industry did come close to the $100 billion marker before, with 2020’s total commissions bringing in $90.5 billion in revenue.
For the total commission revenue calculation, Knock looked at MBA Mortgage’s finance forecast of new and existing home sales for 2020 and 2021, and multiplied them by the industry average commission rate (4.94 percent) for existing home sales. For new construction sales, Knock worked off the assumption that the commissions earned would reflect half that amount.
Knock analysts were then able to quantify what they believe the gross transactional value is using the average home price in the U.S. for both years, after applying the percent of home sellers who are using agents (89 percent) to find the total commission revenue.
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