Home Sale Price: Future Buyers | Home Sale Price: Recent Buyers | Buyers' Financial Struggles | Home Buyer Regrets | Priorities vs. Compromises | Home-Buying Concessions | Forgoing a Buyer's Agent | Buyer's Agent Commission Changes | Fair Commission Rates | Responding to Commission Changes
💸 How are buyers responding to upcoming real estate commission changes? 💸
Although 74% of Americans say it's important to have an agent represent them in the home-buying process, 50% of upcoming buyers would consider forgoing an agent entirely because of recent changes that would require them to pay their own agent's commission.
As peak home-buying season begins, American home shoppers are still contending with perennial problems, such as high home prices, rising mortgage rates, and low housing stock. But this year, buyers must also grapple with changes to the real estate commission model that has governed how homes are bought and sold for decades.
After years of litigation, the National Association of Realtors has agreed to changes that are expected to shift payment of the buyer's agent commission from the seller to the buyer this August. Although this could reduce overall commission costs in the long run, it immediately adds an extra expense to buyers who are already struggling to afford homes.
To learn more about today's home buyers, we surveyed 920 Americans who have recently purchased a home or plan to buy in the next year. We found that buyers stepping into the 2024 housing market have much to learn from previous shoppers.
Although many recent buyers persevered through the challenging market, 82% had regrets about their purchase. Chief among them were spending too much on a home, with 43% saying they've struggled to make their mortgage payment on time and 44% saying they've had to take on additional debt to maintain their standard of living.
With market conditions expected to remain largely unchanged in 2024, upcoming buyers will likely face the same challenges but, potentially, without professional help. One-third of Americans who plan to buy a home (33%) say having to pay an agent would decrease their desire to work with one.
Keep reading to learn more about the sacrifices Americans made to own homes and the difficulties that continue to stand between buyers and homeownership.
🏡 Recent Home Buyer Statistics
- Upcoming buyers plan to purchase a home that costs $483,490 on average, but 52% of Americans who have purchased a home since 2023 spent more than $500,000.
- 31% of 2023 and 2024 home buyers say purchasing a home was harder than expected because of financial reasons, such as exceeding their budget (40%) and high interest rates (38%).
- Since purchasing their home, 44% of recent buyers have had to take on additional debt to maintain their lifestyle, and 43% have struggled to make mortgage payments on time.
- 82% of Americans who bought a home in 2023 or 2024 have at least one regret about the home-buying process, with buyers most likely to regret that their home requires too much maintenance (28%).
- 85% of recent home buyers compromised on their priorities when purchasing a home.
- Although 48% of buyers wanted an affordable home, a whopping 37% bought a home that was more expensive than they planned.
- In a previous survey, 94% of home sellers supported a new commission structure that would require the home buyer to pay their agent, but that percentage dropped to 61% among buyers in this new survey.
- 50% of upcoming buyers say they would consider forgoing an agent because of recent changes that would require them to pay commission.
- The typical buyer's agent commission rate across the U.S. is 2.66% of the final home sale price, but 51% of buyers think a fair commission rate is 2% or less.
- If they had to pay their agent, buyers say they'd lower their home-buying budget by an average of $13,167.
Nearly Half of Upcoming Buyers Plan to Spend More Than $500,000 on a Home
Buying a home is no small purchase, and 58% of prospective home shoppers are understandably nervous — especially in a housing market that does not favor buyers.
Half of upcoming buyers (50%) say it's a bad time to purchase a home. Consequently, 70% are trying to "time the market" so they don't buy when prices are highest.
On average, upcoming buyers want to purchase a home that costs $483,490 — about 2% less than the national average of $492,300.
But for many buyers, the difficult realities of the market will cause them to spend more. Homeowners who purchased a property in 2023 and 2024 spent about $542,000 on average — 12% more than buyers' target price.
Buyers who plan to purchase a home in the next year are doing their best to prepare financially, with 77% already saving for a down payment. Still, coming up with a down payment is no simple feat.
If the average household saved $1,000 a month, it would take roughly eight years to afford a 20% down payment on the average-priced home. It's no surprise, then, that 57% of upcoming buyers plan to put down less than 20% on their home.
At a time when 59% of future buyers say saving for a home makes them feel in over their heads financially, a low down payment may only exacerbate their monetary concerns. By putting down less than 20%, buyers must pay private mortgage insurance, as well as a higher monthly payment over the life of their loan.
In light of these financial obstacles, 59% of upcoming buyers are waiting for mortgage rates to drop before buying a home — which could result in hundreds of dollars of savings each month.
Buying a Home Was Harder Than Expected for 1 in 3 Recent Buyers
Buying a home may not be as difficult as it was in the aftermath of the pandemic, when bidding wars and fierce competition for homes characterized the market. But 31% of Americans who have purchased a home since 2023 say the process was still harder than expected.
Buyers say purchasing a home was more difficult because:
- They exceeded their budget (40%)
- Interest rates were too high (38%)
- There weren't enough homes on the market (38%)
- Homes were too expensive (37%)
Despite less competition among buyers, the nationwide home shortage has prevented prices from dropping significantly. At $492,300, the average U.S. home price remains near an all-time high.
Yet desperate buyers are willing to do whatever it takes to own a home, even if that means paying top dollar. A majority of recent buyers (52%) spent more than $500,000 on their home, but 38% admit they overpaid.
It's a money move many come to regret, with nearly 1 in 4 recent buyers (23%) saying they feel remorse about spending too much.
Another 23% regret that their interest rate is too high. It's not surprising, considering 50% of recent buyers say they accepted a higher-than-expected rate to secure a mortgage.
Still, 68% of buyers are happy they purchased their home when they did — before home prices and interest rates increased even further.
Nearly Half of Home Buyers Feel in Over Their Heads Financially
Homeownership has long been considered one of the best ways to build wealth, but 60% of Americans say their finances have not improved since purchasing a home.
This is especially true of Americans who had to exceed their budget, with 43% of recent buyers saying they've struggled to make their mortgage payments on time.
To maintain their standard of living, 44% of recent buyers have taken on additional non-mortgage debt since purchasing their home. Consequently, 64% of homeowners say their debt burden has not improved.
The expensive — and often surprising — costs of homeownership can be overwhelming, and 47% of recent home buyers say they feel in over their heads financially.
With homeowners worried and stressed about their finances, the initial joy of buying a house can fade quickly. In fact, 51% of Americans say their overall happiness has not improved since purchasing their home.
82% of Recent Home Buyers Have Regrets
In a market known for high prices, few choices, and rising interest rates, home-buying conditions are ripe with regret. Inevitably, some buyers emerge from the process second-guessing their decisions.
About 82% of Americans who purchased a home in 2023 or 2024 have at least one regret.
The most common regret is buying a home that requires too much maintenance. For the 28% of buyers who feel remorse, the cost and time needed to maintain a home can be a shocking discovery — especially when 35% say the seller was not upfront about how much maintenance the home would require.
Other regrets include:
- Buying a home that doesn’t meet all of their needs (24%)
- Spending too much (23%)
- Accepting an interest rate that is too high (23%)
Interestingly, buyer's remorse isn't solely unique to those who have purchased a home. About 59% of future home shoppers regret not buying a home when mortgage rates were lower.
85% of Recent Home Buyers Compromised on Their Priorities
Many buyers regret their home purchase because few walked away from the transaction with their dream home. In fact, 85% of shoppers had to compromise on at least one priority when buying a home.
The top priority among buyers (55%) was finding a home in a good neighborhood, but of those, nearly a quarter (21%) had to settle for a home in a less-desirable area.
Behind a good neighborhood, buyers wanted to find an affordable home. Yet affordable homes remain elusive in this market, and 2023 and 2024 buyers had to compromise on this priority more than any other.
Of the 48% who said an affordable home was a priority, a whopping 37% bought a house that was more expensive than planned — up from 34% the previous year.
After busting their budget on a home, buyers wanted a move-in ready property so they could avoid spending even more money on repairs, which can cost more than $4,000 a year, according to previous Clever research.
Although 34% of home shoppers prioritized finding a house that did not need significant renovations, 28% ended up buying a fixer-upper, making it the second-most common sacrifice after price.
Buying a fixer-upper might seem like a small price to pay to become a homeowner, but 17% of those who bought one in 2023 and 2024 regret it.
Buyers Value a Home's Aesthetics Over a Strong Foundation
After enduring the stress of the housing market, buyers want to enjoy their new homes right away, instead of starting expensive and inconvenient renovations to an outdated home.
For 33% of buyers, the most desirable improvements in a home are an updated kitchen, remodeled bathrooms, and contemporary lighting.
Buyers place so much value on these cosmetic updates that they often take precedence over the structural elements of a home.
While 33% of buyers say an updated kitchen is important, only 24% say the same about a solid foundation. Similarly, just 25% of buyers say a new HVAC system is important, and 29% say an updated electrical system is important.
Aesthetic changes can certainly add value and style to a home, but buyers should look beyond the facade to a home's underlying qualities. Cosmetic fixes can mask structural problems that may cause safety hazards and lead to expensive repairs that most buyers want to avoid.
91% of Buyers Asked for or Made a Concession
As buyers are squeezed by high home prices and interest rates, many are looking for ways to reduce their costs in the form of seller concessions. About 83% of buyers asked the seller for at least one concession, including:
- A lower asking price (29%)
- Money to make repairs (27%)
- The ability to keep appliances or furniture (26%)
- A home warranty (26%)
- An early move-in date (26%)
Although buyers are regaining some power to ask for concessions in 2024, sellers still have the upper hand in many markets across the country. Consequently, 65% of buyers had to make concessions to the seller.
Americans say the most-coveted properties are those that don't need repairs, but 26% of buyers agreed to purchase a home as-is, making it the most common concession.
Buyers also agreed to:
- Waive the financing contingency (23%)
- Increase their original offer to beat a competing offer (23%)
- Help the seller cover moving costs (20%)
- Waive the inspection contingency (19%)
- Waive the appraisal contingency (17%)
Acquiescing to sellers' demands is sometimes necessary to get an offer accepted, but 38% of buyers thought the seller took advantage of their desperation to become homeowners.
Half of Recent Buyers Think Agents Prioritize Profits Over Their Clients' Best Interests
Purchasing a home can be a complicated and stressful process. Although there are more online resources than ever before to help buyers, a majority still depend on real estate agents for information.
About 78% of upcoming buyers plan to hire a real estate agent. Meanwhile, 71% of Americans who purchased a home in 2023 or 2024 used a Realtor, but 42% say their agent was less helpful than expected.
What's more, 54% of recent home buyers think their agent cared more about making a deal than their best interests.
Deep-seated concerns about real estate agents caused 29% of buyers to go without representation in the home-buying process. Of those, 32% did not hire a Realtor because they don't trust agents, while another 32% wanted more control over the home-buying process.
About 30% of buyers did not use an agent because they wanted to save money — indicating a lack of awareness about how real estate commission was paid before the NAR lawsuit took effect.
Although 68% of recent buyers say they are informed about commission fees associated with their purchase, 45% think buyers pay their agent's commission under the current system. In reality, when the survey was conducted, the home seller typically paid for their own agent, as well as the buyer's.
1 in 3 Buyers Would Be Less Inclined to Hire an Agent If They Had to Pay Commission
When the survey was conducted, buyers were not expected to pay their own agent, but there were changes to the traditional commission model in August 2024.
In March, the National Association of Realtors settled a lawsuit brought by home sellers who claimed the organization's commission model was rigged to artificially inflate how much agents are paid.
Under new rules, which took effect August 17, sellers would no longer be required to pay a predetermined amount for the buyer's and seller's agents to split. Instead, buyers would need to negotiate — and pay — their own agent's compensation.
In a previous survey, 94% of upcoming home sellers supported a new commission structure that would require the home buyer to pay their agent, but the percentage drops to 61% among buyers in our current survey.
Buyers are understandably wary of a new commission model that would increase their upfront expenses. Yet proposed changes could lead to greater benefits, such as increased transparency about how commission is paid and what services are included. In fact, 74% of Americans say they'd be more inclined to use an agent if they could see a detailed breakdown of services included in the commission cost.
The settlement could also give buyers more flexibility to pick and choose the services they want to pay for — while saving money on those they can do themselves. Buyers already show an interest in different payment models, with 67% saying they'd prefer à la carte real estate services rather than a full-service package.
However, not all buyers see the benefits, and 33% say having to pay their agent would decrease their desire to work with one.
Although 75% of Americans say it's important to have agent representation in the home-buying process, 50% of upcoming buyers are considering purchasing a home without an agent because of recent changes that would require them to pay commission.
Upcoming home buyers who plan to forgo an agent:
- Want more control over the home-buying process (38%)
- Think they can handle the home-buying process themselves (37%)
- Want to save money (34%)
Rather than forgo an agent altogether, some buyers are simply changing their strategy. More than half of buyers (51%) plan to speed up their home purchase before the NAR settlement changes go into effect this August.
Half of Buyers Don't Want to Pay Their Agent More Than 2% in Commission
Buying a home without a real estate agent is possible, but there's no denying that working with one has its benefits. About 95% of Americans admit agents provide at least one valuable service.
Buyers say the most useful agent services are:
- Negotiating with sellers (56%)
- Assisting with paperwork (53%)
- Finding a home (52%)
Despite their helpfulness, buyers are frustrated by how much agents charge for these services.
The typical buyer's agent commission rate nationwide is 2.66% of the final home sale price. Yet 51% of buyers think a fair commision rate is 2% or less — including 8% who don't think buyers should have to pay their agent any commission at all.
Of those who don't want to pay their agent, 42% cling to the traditional belief that the seller should be responsible for commission. Another 42% don't see the value in paying for an agent, while 30% say they don't have the money.
Nearly All Buyers Would Change Their Home-Buying Strategy If They Had to Pay Their Agent
Changes to the real estate commission model are imminent, but many Americans who plan to enter the housing market in the next year remain unaware. Nearly half of upcoming home buyers (47%) are not familiar with the National Association of Realtors settlement that would likely make buyers responsible for their agent's commission fee.
The move could add thousands of dollars to Americans' home-buying expenses and change the way they approach purchasing a home. About 91% of home shoppers would change their buying strategy if they had to pay their agent's commission.
Although 70% of buyers say they're comfortable negotiating commission rates with agents, buyers would first look to save money in other ways. About one-third would:
- Be more selective in choosing a buyer's agent based on their commission rate (35%)
- Reevaluate their budget to accommodate the additional cost of commission (34%)
- Negotiate with their agent for a lower commission rate (34%)
- Negotiate for a lower home purchase price to offset the cost of commission (32%)
- Negotiate with the seller to offset the cost of commission (31%)
More than 1 in 4 buyers (27%) would also consider buying a less expensive home. If they had to pay their agent, buyers say they'd lower their home-buying budget by $13,167 on average.
Methodology
Clever Real Estate surveyed 920 recent and upcoming home buyers on their views of the home-buying process and real estate agents. This includes 420 Americans who bought a home in 2023 and 2024 and 500 who plan to buy a home in 2024 or 2025. This survey was conducted April 4-15, 2024.
About Clever
Since 2017, Clever Real Estate has been on a mission to make selling or buying a home easier and more affordable for everyone. 12 million annual readers rely on Clever's library of educational content and data-driven research to make smarter real estate decisions—and to date, Clever has helped consumers save more than $160 million on realtor fees. Clever's research has been featured in The New York Times, Business Insider, Inman, Housing Wire, and many more.
More Research From Clever
Articles You May Like
FAQs
What is housing sentiment?
Half of upcoming buyers (50%) say it's a bad time to purchase a home, and 59% are waiting for mortgage rates to drop before buying a home. Learn more.
How do the majority of home buyers pay for their home?
Buyers who plan to purchase a home in the next year want to purchase a home that costs $483,490 on average. About 77% of them are already saving for a down payment, but 57% plan to put down less than 20% on their home. Learn more.
How would Americans' home-buying strategy change if they had to pay their agent?
More than 1 in 4 buyers (27%) would consider buying a less expensive home. If they had to pay their agent, buyers say they'd lower their home-buying budget by $13,167 on average. Learn more.