NAR settlement a ‘major boost’ for homebuilders, says Evercore ISI

After the National Association of Realtors settled the Sitzer/Burnett case for $418M and agreed to alter its commission structure, Evercore ISI called the news a “major boost” for homebuilders given the expectation that home buyers will now be expected to pay for their own agents, which the firm believes should apply downward pressure on commissions. Should the federal court approve the settlement, the changes are expected to be implemented in mid-July of 2024 and the firm expects buyer agent commissions to decline quickly, says the firm, which adds that a shift in broker fees “represents a significant positive for builder margins.” Publicly traded homebuilders include D.R. Horton (DHI), Meritage Homes (MTH), KB Home (KBH), Taylor Morrison (TMHC), PulteGroup (PHM), TRI Pointe (TPH), M.D.C. Holdings (MDC) and Toll Brothers (TOL).