Leaning into the stiff headwind of 7% mortgage rates and facing the prospect of more turbulence from the macroeconomy, brokers saw their confidence falter last month, though sentiment continues to trend higher during what is traditionally the slowest season for real estate.
RISMedia’s latest Broker Confidence Index (BCI) fell to 6.4 from 6.6 last month, as real estate thought leaders around the country felt the effects of higher mortgage rates and hesitant consumers—but simultaneously noted an unseasonably brisk housing market.
“Actual activity—sales, pendings and seller and buyer inquiries—are fairly active,” reported one broker, who asked to remain anonymous. “Pending sales are strong.”
Another anonymous broker offered a less than optimistic view of the near future, though, saying they have “(c)oncerns about macroeconomic and geopolitical risks, along with election year rhetoric that could damage consumer confidence.”
While mortgage rates are roughly the same now as they were at this point in 2023, brokers back then were riding a wave of positive sentiment from lower inflation and surging home sales. Early data is showing an uptick in real estate transactions, but in 2024, brokers appear more cautious in their assessments of the near future.
“Prices are too high for most buyers,” said one broker simply.
Back in 2023, the focus in real estate remained largely on rates, a potential recession and persistent inflation (along with the ever-present, everyday issues of rates and inventory). The big picture in 2024 now appears to be shifting toward the larger, more existential, industry-specific threats—lawsuits, portals and the potential for “decoupled” commissions.
Even somewhat recently, brokers have expressed relatively low levels of concern about ongoing commission class-action lawsuits, which have resulted in three settlements by big real estate brokerages (so far) totaling more than $200 million. Even the prospect of “decoupled” commissions, where seller agents no longer pay buyer agents, only sparked moderate worry in brokers surveyed by RISMedia.
Less in the news but a potentially looming issue for brokers is the influence of the big consumer-facing portals, who have sought to integrate themselves into real estate transactions at every point. The so-called “portal wars” appear to have reached a new level of intensity in the last year or so, with household name Zillow claiming to be closing in on a “super app,” and relative newcomer Homes.com making a big splash with a billion-dollar marketing campaign and a focus on listing agents.
This month, RISMedia asked brokers if they partnered with any of the portals for marketing, leads or other services, as well as their overall sentiment toward these companies.
Unsurprisingly, those running real estate brokerages continue to have a negative overall view of these industry behemoths, who were long seen as potential threats to the practice of traditional real estate. In the survey, none of the big portals received a net favorable rating from brokers.
Interestingly, though, most brokers continue to have some sort of relationship with these companies. Just under six in 10 (58%) said they worked with at least one of the big portals—Zillow, realtor.com® or Homes.com—with Homes.com used exclusively by 30% of surveyed brokers.
That could be a sign that an all-out push led by the company’s deep-pocketed parent, CoStar, could be beginning to make inroads—even as Zillow’s Premier Agent program remains the more established program for agents.
