The dual shocks of the 2022–2024 housing sales downturn and the outcomes of significant litigation are now in the rearview mirror. In response, many brokerage firms have adapted their business models to navigate these challenges. While these adjustments have allowed firms to achieve profitability at current sales levels and comply with the changes to MLS policies resulting from the settlement, it does not necessarily signal a return to the heights previously seen in the industry.
Competition for agents remains as intense as ever. Agents now have more choices than at any other time, including low-cost options. Consequently, the average gross margin for U.S. brokerage firms continues to decline, sitting near 10% by the end of 2024. Several national real estate entities now operate with gross margins below this threshold.
We anticipate that this economic pressure will accelerate industry consolidation, with mergers and acquisitions occurring at a faster pace than in previous years. Additionally, segmentation among brokerage firms is likely to increase, driven by differences in cost structures and technology adoption. While artificial intelligence may play a role, we suspect focus will remain on more effective deployment of foundational tools such as transaction management systems, sales management platforms, and robust CRM systems.
Read more:
- When Did More Government Become the Answer to Housing?
- AI and the Future of Residential Brokerage: Automation, Data Power, and the Human Advantage
- What’s Next for Real Estate Brokerage Mergers and Acquisitions in 2026
- 🎧 Steve Murray Discusses the Compass-Anywhere Merger on HousingWire’s RealTrending Podcast
- Compass Acquires Cottingham Chalk, REALTORS® – RTC Consulting Advises on Strategic Sale
