A. The Numbers at a Glance
As of early 2025, the national average real estate commissions fee for residential home sales is about 5.44%, split as 2.77% for listing agents and 2.67% for buyer’s agents. A FastExpert survey puts it slightly higher at 5.57%. Commissions hit a five‑year low of around 5.32% in 2024, but have since bounced back to roughly match the 2023 average of 5.49%. Redfin reports the average buyer’s agent commission at 2.40% in Q1 2025, up from about 2.36% in late 2024 and slightly down from approximately 2.43% in early 2024.
In short: after a dip in 2024, commissions have rebounded, edging upward across most U.S. markets.
1. Why Commissions Fell in 2024
Two major forces drove commissions down in 2024:
First, in March 2024, the National Association of Realtors (NAR) settled a major class-action lawsuit, Burnett v. NAR,for $418 million. The case centered on allegations that NAR enforced policies that inflated commissions by requiring sellers to prepay buyer’s agent fees.
Second, beginning in August 2024, NAR prohibited posting buyer-agent compensation in MLS listings. Instead, buyers are now required to pre-sign a broker agreement that specifies how their agent will be paid. This regulatory shift was expected to cause sharp commission reductions, but in reality, average rates only fell slightly before recovering.
2. Why Commissions Are Rising Again in 2025Commissions have rebounded in 2025 for several reasons.
First, the market is stabilizing after last year’s policy shock. Buyer-side commissions have recovered, from about 2.55% in early 2024 to roughly 2.67% in early 2025.
Second, commissions are seeing regional increases. In 2025, 39 states reported higher average commissions compared to the previous year, while only 10 reported declines. New York remained flat. These differences stem from local market dynamics, home values, and agent practices.
Third, many listing agents still maintain leverage in negotiations. Despite new rules, most sellers still pay buyer-agent commissions via seller-closing contributions, meaning buyers are not yet commonly paying their agents directly.
Fourth, while the new policy allows buyer agents to charge clients directly, many buyers still negotiate for the seller to cover that cost. In high-demand or luxury markets, buyer-paid agent models may emerge, but nationwide adoption has been slow.
3. Who’s Most Affected?
Sellers are typically still paying a total commission around 5.44%. On a $367,000 home, that equates to roughly $20,000 in fees. In competitive markets, sellers may be able to negotiate lower fees or explore flat-fee options, but many still opt for full-service traditional brokerages.
Buyers are better informed about how commissions work and are more aware that they may be responsible for compensating their agents directly under the new rules. In practice, though, seller-paid commissions are still the norm in most transactions. Some new-construction homes and high-demand listings are shifting the cost to buyers, but it’s not yet widespread.
Agents are adapting. Listing agents have seen a modest increase in average commission, from about 2.72% in 2023 to 2.77% in early 2025. Buyer agents’ earnings hover around 2.4 to 2.7%, depending on the market. Many agents report having to better articulate their value proposition and are spending more time negotiating their compensation upfront with buyers.
4. What Drives State-Level Differences?
Real estate commission rates vary widely across the country. Several factors influence the differences.
First, home price levels play a role. In markets with lower average home prices, such as the Midwest or parts of the South, agents tend to charge higher commission percentages to ensure a viable income. In contrast, in high-priced markets like California or New York, commissions tend to be lower as a percentage, but agents still earn more per transaction.
Second, contract norms and regional culture matter. Some states have long favored discount brokerages and flat-fee MLS services, while others maintain strong traditional brokerage practices.
Third, the response to NAR’s policy changes varies by region. In some markets, buyer-paid agent fees are already becoming the standard. In others, sellers continue to offer commissions to buyer agents through alternative channels, such as seller concessions or off-MLS agreements.
5. What the Future Holds
As 2025 unfolds, it’s clear the real estate industry is not undergoing a commission revolution, but rather entering a phase of renegotiation and realignment.
Negotiation is now front and center. Both buyers and sellers are more aware of commissions, and many are using that awareness to discuss fee reductions or performance-based incentives. In high-inventory markets, sellers may offer buyer-agent commissions to stand out, while in low-inventory markets, buyers may have to pay more out of pocket.
Flat-fee and discount brokerages are gaining traction. Companies like Redfin, Clever, and Houzeo continue to offer lower-cost listing packages. However, many consumers still prefer full-service agents for the guidance, support, and marketing expertise they provide.
Legal and regulatory developments remain a wildcard. The U.S. Department of Justice is still reviewing aspects of the NAR settlement and has not ruled out further antitrust action. Ongoing scrutiny could lead to additional rules governing how commissions are disclosed and paid.
Market conditions also influence commission trends. If mortgage rates fall and transaction volume increases, agents may accept lower commission percentages in exchange for a higher number of sales. Conversely, in slower markets, agents may push to preserve their fees due to fewer opportunities to close deals.
6. Conclusion
After dipping in 2024, U.S. real estate commissions have rebounded in 2025. While some expected sweeping changes following the NAR lawsuit and rule updates, the actual effect has been more nuanced. The average total commission remains around 5.44%, with buyer-agent and listing-agent shares slightly increasing from their post-settlement lows.
The industry is evolving, but not collapsing. Buyers, sellers, and agents are adjusting to new norms, negotiating more openly, and exploring alternative models. Yet traditional commission structures continue to dominate, especially in markets where consumer behavior has yet to shift dramatically.
As new policies take hold and more transactions are completed under the updated system, future years may bring more change. For now, the U.S. real estate commission structure remains largely intact, although more transparent and slightly more flexible than before.
