Recent private and government antitrust suits have been directed at stamping out a variety of allegedly anticompetitive real-estate industry practices. A 2024 settlement between private plaintiffs and the National Association of Realtors sought to reduce brokerage commissions by promoting transparency and competition among realtors. Sound antitrust enforcement, though no panacea, may over time prove to be an effective legal vehicle to phase in procompetitive real-estate industry reforms.
The Problem of High Real-Estate Brokerage Fees
Pricing and Competition
A 2025 U.S. Chamber of Commerce report focused on a U.S. housing deficit that is “rooted in a decade of underbuilding following the Great Recession and surging demand from millennials entering prime home-buying years, [which] has driven up prices and worsened affordability.”
The problem of high home prices is exacerbated, the Chamber found, by persistently high average realtor commission rates, perhaps reflecting weak competition:
- The prevailing average 5-6% U.S. realtor commissions are far above the averages in most other developed countries.
- A Brookings Institution study found that U.S. commission rates are “persistently high” and insensitive to competition.
- The Brookings study cited research finding that U.S. discount realtors typically are less successful than traditional high-fee realtors, perhaps due to a lack of cooperation from the traditional realtors.
- The study also discussed other factors the authors saw as signs of weak and ineffective competition in real-estate brokerage.
- In particular, “[d]espite . . . remarkable technological advances that can lower the cost of matching buyers with houses and facilitate housing transactions, the real estate brokerage industry in the United States still commands a persistently high price for services rendered.”
The Structure of US Real-Estate Brokerage
Competition in U.S. real-estate brokerage features a unique structure:
- Most real properties are listed through one of the 500 computer-enabled multiple listing services that operate in separate U.S. localities.
- MLSs are typically created and owned by local realtor associations or large brokers. They operate under rules set by the National Association of Realtors.
- As the NAR explains: “MLSs provide online platforms that compile home listings from brokerages in a given market. They enable agents to efficiently see available homes for sale and get helpful marketplace data and typically share listing information to national and local websites that advertise property information. There are many MLSs across the U.S., and each has its own rules to make sure its information is complete, accurate, and transparent.”
- The NAR is the largest U.S. trade association, representing more than 1.5 million residential and commercial real-estate professionals, including agents, brokers, and appraisers.
- The NAR provides its members with industry-specific data, market data, education, and networking opportunities, while also advocating for property-ownership rights and professional standards, including a Code of Ethics.
- Some critics have alleged that the NAR has weakened competition by promoting anticompetitive practices. These include, for example, setting rules that discourage price competition among real-estate agents; forcing agents to join the NAR to gain access to MLSs; and restricting lower-cost brokers’ access to MLSs.
- In its defense, the NAR argues that it provides beneficial industry data and training to its members. It also stresses that MLSs centralize and standardize property information, creating an orderly and transparent market that benefits buyers and sellers.
Antitrust Enforcement as a Possible Cure
Sound antitrust enforcement may be highly effective in challenging real-estate industry conduct that is plainly designed to undermine the competitive process and harm consumers. Antitrust automatically condemns “naked” agreements among competitors to fix prices or quantities, or to divide markets. Less-obvious restraints may also violate the antitrust laws under a case-by-case “rule of reason” analysis.
In examining real-estate practices (or any other business practices) under the rule of reason, antitrust enforcers need to avoid merely relying on abstract theories of possibly bad behavior. Rather, they need to scrutinize hard market facts backed by sound economics that show consumer welfare is harmed by the business practice they are investigating.
In so doing, enforcers also should ensure that potential harm to consumers is not fully offset by commercial efficiencies that redound to the consumer’s benefit. Novel forms of business conduct that governments have not seen before should not be assumed anticompetitive without solid evidence. It is important that dynamic business improvements—which often drive innovation, expand markets, and create future consumer gains—not be discouraged by overly aggressive enforcement that is too quick to assume a practice is anticompetitive.
Real Estate Antitrust Scrutiny
Anticompetitive Broker-Compensation Arrangements
Private litigation has targeted cooperative compensation rules established by the NAR and implemented via MLSs. Under these rules, sellers were required to offer a commission to the buyer’s agent, and that compensation was publicly advertised on the MLS. Other rules that discriminate against discount brokers are also being challenged.
The U.S. Justice Department (DOJ) and Federal Trade Commission (FTC) have been closely scrutinizing the real-estate industry. They have expressed concerns over the practices surrounding agent commissions and are generally supportive of private suits directed at those concerns. The two agencies also are focusing on other questionable industry practices, such as “payments not to compete” made to “disruptive” competitors. Decisions to prosecute will be justified when hard economic evidence indicates the particular practices under scrutiny undermine competition and reduce consumer welfare.
Three Major Lawsuits
Burnett v NAR
In this case, home sellers alleged the NAR and major brokerage firms conspired to inflate real-estate commissions by mandating offers of buyer-agent compensation within MLSs. A jury found the defendants liable in 2023, leading to a massive jury award.
A 2024 settlement of the case included a $418 million payment to plaintiffs, plus key NAR rule changes, such as no longer listing buyer’s agent commissions on MLS listings, requiring written buyer-broker agreements that specify compensation, and prohibiting agents from accepting more compensation than was agreed upon with the buyer. These changes aim to increase transparency and competition in the real-estate market.
REX v Zillow & NAR
The Real Estate Exchange (REX) sued Zillow and the NAR in 2021, alleging antitrust violations. REX was a privately held discount broker that offered consumers commissions that were 50%-75% below the NAR average. Zillow is an online real-estate marketplace and data company that helps people buy, sell, rent, and find homes.
REX claimed that Zillow—by separating non-MLS listings into a different tab to comply with NAR’s “no-commingling” rule—effectively destroyed REX’s business. The rule prevents the display of non-MLS listings with MLS listings on websites using IDX data feeds (which allow agents and brokers to display property listings from the MLS on their own websites and applications). The NAR dropped the non-commingling rule in June 2025.
Both the federal district court (in 2023) and the 9th U.S. Circuit Court of Appeals (in March 2025) ruled in favor of Zillow and NAR, finding the no-commingling rule was optional and that an anticompetitive conspiracy had not been proven. REX has petitioned for Supreme Court review (the Court grants only a small percentage of such petitions).
FTC v Zillow and Redfin
The FTC sued Zillow and Redfin in federal court in September 2025, alleging they engaged in anticompetitive behavior through an unlawful “partnership agreement,” whereby Zillow paid Redfin $100 million to exit the multifamily-rental advertising market. Redfin is a real-estate company that uses its platform to connect homebuyers and sellers with local agents, offers mortgage services, and provides real-time home-listing information.
The FTC claims this deal, which also included Redfin transitioning its rental clients to Zillow and sharing competitively sensitive information, eliminated a direct competitor and will likely result in higher prices and reduced innovation in online rental advertising. The lawsuit seeks to end the agreement and restore competition.
Big Picture Takeaway
The effectiveness of antitrust suits in transforming anticompetitive real-estate industry practices remains to be seen.
The rule changes due to the Burnett v. NAR settlement create the potential for lower commission rates through direct negotiation and increased transparency. As the latest data indicates, however, market dynamics can be slow to change, and the long-term impact on competition and costs is unclear.
Other antitrust challenges are targeting NAR rules that harm discount brokers and private agreements that exclude competitors. If successful, these suits could further enhance price competition in real-estate sales and rental housing. Their prospects for success, however, are uncertain.
In the short term, it is unrealistic to expect that antitrust alone can overcome a real-estate sales culture that disdains price competition. Over time, however, a succession of antitrust challenges could steadily erode adherence to longstanding industry practices that discriminate against discounters and harm consumers.