“When mortgage rates are fluctuating because the underlying economy is fluctuating, it causes buyers and sellers to stay on the fence,” Chris Kelly, who took over the largest US residential real estate brokerage on April 15, said in a recent interview.
Higher borrowing costs contributed to a greater-than-expected 5.9% drop in March US sales of existing homes, to a seasonally adjusted 4.02 million unit annual rate, with more weakness likely as tariffs fan fears of a recession.
“The high degree of volatility we’ve seen in the last couple of months is giving buyers and sellers a little bit of pause.
“But there are still 4 million people who are going to make a move this year,” Kelly said.
HomeServices is a unit of Berkshire Hathaway Energy, which is part of Warren Buffett’s conglomerate, and owns or franchises more than 2,200 brokerage offices with over 82,000 agents.
It lost money in 2024, largely from its US$250 million settlement of antitrust litigation accusing the National Association of Realtors (NAR) and brokerages of inflating commissions.
HomeServices was the last defendant to settle the landmark case, though Berkshire Hathaway Energy faces related claims.
The brokerage commission settlement ended the practice of having sellers pay commissions, typically 5% to 6%, to their agents, who would split them with buyers’ agents.
Splits would be communicated over private databases known as multiple listing services (MLS), which only agents would see. Sellers claimed this was secretive and inflated closing costs.
The NAR’s clear cooperation policy requires agents to list properties on their MLS within one business day of marketing the properties to the public.
Supporters say it adds transparency and provides equal access to listings, while critics say it restricts sellers’ ability to choose marketing strategies.
“That’s where the current battlefront is: what happens if more properties are listed as exclusives, or marketed with more limited exposure.
“From our perspective, the vast majority of properties benefit from the widest exposure possible, which means putting it in the MLS,” Kelly said.
He added that “We always want the consumer to have a high degree of clarity on the fee and commission structure”.
HomeServices has curbed its once aggressive appetite to buy brokerages to fuel growth, and Kelly said it will likely emphasise “tuck-ins” of brokerages that might struggle to compete on their own.
But he also said HomeServices has diverse revenue streams from mortgages, title and insurance, citing its stake in nationwide underwriter Title Resources Group, which can cushion the blow when one segment falters.
Kelly, 49, joined HomeServices’ network in 2007 when he left private law practice to become general counsel at Kansas- and Missouri-based ReeceNichols.
He later moved to the parent company. Kelly reports to Berkshire vice-chairman Greg Abel, who is expected to succeed Buffett as chief executive.