US Brokers Report Jump in Commissions

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As the U.S. housing market continues to recover, residential real estate brokers and agents reported the largest annual commission increase in eight years in April, according to a government index.
 
The dollar value of commissions for real estate agents increased by 2.7 percent in April alone, the largest monthly gain in 17 years, according to the producer price index tracked by the U.S. Bureau of Labor Statistics.
 
Commissions increased 9.1 percent year-over-year, representing the largest annual gain since August 2005, according to the Wall Street Journal. 
 
With a short supply of available homes and home prices rising, sellers are once again willing to pay full commissions to realtors, who were among those most affected by the housing bust, WSJ reports. 
 
Instead of the typical 2.5 percent paid to sellers' agents for distressed housing transactions, "we're seeing a lot more 3 percent commissions," Kenny Klaus, an agent in Mesa, Arizona, told the WSJ. 
 
Phoenix builder Maracay Homes recently offered as much as a 7.5 percent commission to brokers who sold five Maracay homes, WSJ reports.
 
Commission rates for Realogy brokers have stayed at around 5 percent per transaction, but the average sale price of homes sold through Realogy brokerages increased 7.7 percent from 2011 to 2012, the WSJ reports.

"As commissions and volume goes up, there's going to be a decent-sized improvement in their earnings," Evan Mann, a debt analyst with Gimme Credit, told the Journal.

As the market recovers, realtors are benefiting in many ways. Many purchased homes to rent or flip before the downturn and now they have the opportunity to see profits on their investments.