US real estate commission by state: what is the average rate for selling a house?
After a post-pandemic housing boom prices are on their fastest deceleration on record as the US nears a recession.
Real estate commission is the money home sellers pay to the agency or agent that helped them sell their home.
Typically the real estate commission on a property is between 4 and 6 percent of the sale price. This is split in half between the buyer’s agent and the seller’s agent. For example, this amount of commission would mean between $20,000 and $30,000 paid on a $500,000 property. The seller usually pays the commission instead of the buyer.
None of these rates are set in stone and, like everything when buying or selling a house, open for negotiation.
According to data from home selling agency Clever, there are seven states with average commissions of under 5 percent; Oregon, Hawaii, Alaska, New York, District of Columbia, California and Massachusetts the cheapest.
Ohio has the highest average commission rates at 5.81 percent, followed by Georgia, Missouri, Wisconsin, and the two Dakota states.
What is going on with the US housing market?
Housing prices across the United States soared during the covid-19 pandemic but red-hot inflation numbers across the economy have prompted the Federal Reserve to move aggressively. As a consequence of four consecutive rate increases, two three-quarter percentage hikes in June and July, borrowing cost have become more expensive raising mortgages for homebuyers to their highest since 2019.
The low interest rates may have played a factor in US housing being overvalued with the average home price over the half-million-dollar mark in twenty of the top hundred markets.
Compared to a year prior, house prices grew 15.6 percent in July. However, justa month later this increase had fallen 2.6 percentage points to 13 percent. Mortagage payments now make up 30 percent of the average homeowners icnome.
S&P managing director Craig Lazzara said the decline “clearly” shows the growth of home prices peaked this spring and that the “forceful deceleration... may well continue.”