New real estate commission rules now in effect

Plus: This credit score myth could hurt your score, says FICO expert

August 19, 2024

🚨 Alert! It's Monday. Today’s newsletter is 529 words, a 2.5-minute read.

Disclaimer: Average mortgage rates as of August 16, 2024. © MND Daily Rate Index.

1. A new set of rules governing how most real estate professionals do business take effect

The rules were agreed to by the National Association of Realtors, the powerful trade association that counts 1.5 million members, as part of a $418 million settlement into antitrust claims.

The rules are designed to transform the way Realtors get paid and who pays them. It’s the largest change to the organization’s rules in at least a generation.

As a reminder, under the settlement, the following practice changes will take effect:

  • Offers of compensation will be prohibited on Multiple Listing Services (MLSs). Offers of compensation will continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals.

  • Agents working with a buyer must enter into a written buyer agreement before the buyer can tour a home. The practice changes do not require an agency agreement or dictate any type of relationship.

In a statement, Kevin Sears, NAR’s president, said that the changes “help to further empower consumers with clarity and choice when buying and selling a home.” He then added, “I am confident in our members’ abilities to prepare for and embrace this evolution of our industry and help to guide consumers in the new landscape.”

2. New-home construction hits a a COVID-era low

According to Commerce Department data, total housing starts fell 6.8% month-to-month in July, slipping to a 1.23 million annualized rate.

  • Single-family starts dropped by 14.1 percent to a rate of 851,000, a 14.8 percent annual decrease. Multifamily starts, at the rate of 363,000, represented an 11.7 percent increase from the prior month but a 21.8 percent year-over-year decline.

That marks the lowest level since April 2020, when pandemic factors pushed the rate down to 938,000.

Although the post-COVID era saw construction momentum surge, high-mortgage-rate pressure and buyer uncertainty have stalled new home projects.

3. More Nuggets

📊 CHART: Late mortgage payments track almost exactly to unemployment rate. (The Basis Point)

🚫 This common credit score myth could hurt your score, says FICO expert. (CNBC)

🏘️ Homebuilders want to keep Realtors happy as NAR settlement deadline looms. (The Business Journals)

📱 Hey baby, can I get your number? And by that, I mean your credit score. (WSJ)

4. FedNow to add more fraud tools, Fed official says

The Federal Reserve is enhancing its FedNow instant payments system with new tools to help financial institutions combat fraud.

Launched in July 2023, FedNow allows payments to settle in seconds, a significant improvement over the traditional multi-day process. Nearly 900 U.S. financial institutions have joined the system, with the Fed aiming to onboard around 8,000.

The Fed is focused on adding features like liquidity controls and fraud prevention tools as it addresses concerns about the risks associated with faster payments.

☀️ You’re all caught up. See you on Wednesday!

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