While real estate agent commissions on average haven’t moved much since last year's landmark National Association of Realtors settlement agreement, new research pinpoints how some adjustments are being seen on home sales above certain price points.

Data from real estate firm Redfin Corp. indicates that the average buyers' agent commission was 2.37% for homes sold in the fourth quarter, largely unchanged from 2.36% in the third quarter but down from 2.45% in the fourth quarter of 2023.

Announced in March, the $418 million NAR settlement came in response to a wave of class-action lawsuits in which plaintiffs charged the NAR’s “participation rule” and “cooperative compensation” practices unfairly forced home sellers to pay inflated commissions to buyer agents. Plaintiffs argued a complex network of rules kept buyer-broker commissions high and essentially mandated the seller offer buyer commissions.

The NAR reached its settlement agreement after a jury verdict of $1.78 billion in 2023 against the trade association and several big brokers. Additional settlements between brokers and plaintiffs in a number of cases pushed the ultimate collective value of the settlement deals toward $1 billion.

Some local associations did not sign onto a settlement and are not bound by the settlement agreements.

The NAR as part of its settlement agreed to a series of internal changes that took effect in August. Those steps include sellers no longer being able to make offers of buyer-broker commissions on any Multiple Listing Service the NAR owns, although they can still make commission offers on other websites and through negotiations.

How commissions have changed since NAR settlement

The Redfin survey of real estate agents found that 48% of the 500 agents surveyed feel the average commission has remained the same since the NAR settlement took effect. Forty-three percent said commissions have declined, while 4% said commissions have increased.

Three-quarters of the agents said they believe declining commissions will be an issue over the next five years, with 51% believing commissions will decline more in the next 12 months, while 38% said they will stay the same.

For homes that sold for $1 million or more in the fourth quarter, the average buyer’s agent commission was 2.17%, according to the NAR findings. That’s down from 2.22% in the third quarter — when the NAR settlement took effect — and down from 2.33% a year earlier, prior to the settlement agreement.

Among homes that sold between $500,000 and $999,999, the average buyer’s agent commission was 2.26%, on part with 2.27% in the third quarter but down from 2.36% in the fourth quarter of 2023.

For homes that sold for less than $500,000, the average buyer’s agent commission was 2.46%, up from 2.42% the prior quarter but down from 2.5% a year earlier.

“When news of the settlement first came out, some sellers thought they were going to pay nothing to the buyer’s agent. That’s not happening; sellers are realizing most buyers are requesting the seller pay for their agent as part of the offer,” said Desiree Bourgeois, a Redfin Premier agent in the Detroit area, in a statement about the commission data. “It’s an ongoing conversation, but people are starting to understand and asking more pointed questions.”

Soaring prices push millennials into precarious home-buying position

The change in commissions comes at a time when soaring home prices have dashed the homeownership dreams of many millennials.

In the second quarter of 2020, the median sale price for homes sold in the United States was $317,100, according to data compiled by the Federal Reserve. By the second quarter of 2022, that number was $437,700, up 38%. It has since dropped to $419,200, but that's still up 32% from five years ago.

According to a recent survey by Clever Real Estate, just 21% of millennials believe their generation can afford a home, a substantial decline from 52% who said the same in early 2024. Additionally, 96% of respondents said they have concerns about purchasing a home, with 44% saying they're worried about finding an affordable home — up from 35% in 2024.

The report notes that the median home price is about $420,000, but 68% of millennials who want to buy a home in 2025 want to spend less than $400,000. That's up from 57% who planned to spend less than $400,000 last year.

The survey also showed that 57% of millennials have a strong enough desire to be a homeowner that they said they'd be willing purchase a home that smelled like cigarette smoke — and 41% said they would purchase a home that had asbestos in it. Forty-one percent also said they'd be willing to buy a house with pests in it, such as mice, cockroaches or spiders; 40% said they would buy a house with a leaky roof; and 35% said they'd be willing to accept foundation issues.

The cost of a so-called “starter home” has soared in recent years, as well, according to a separate analysis by Redfin. In 2012, the typical median sale price for what Redfin defined as a "starter home" was $95,000. That price rose in 2019 to $165,500 — and it rose further, to $250,000, last year. 

The research also notes that while the typical household earns 8.9% more than they need to afford the median-priced starter home, in 2019, the typical household earned 57% more than they needed to afford the median-priced starter home. In 2012, the typical household earned 113% more, or more than twice as much as they needed.