President Joe Biden knows high housing costs are a barrier to his bid for reelection.
“The last I saw, the combination of the inflation, the cost of inflation, all those things, that’s really worrisome to people, with good reason,” he said in a May interview with CNN. “That’s why I’m working very hard to bring the cost of rentals down, to increase the number of homes that are available.”
On Thursday, a coalition of progressive groups sent Biden’s administration a gentle reminder about a powerful argument he can deploy to show he’s already begun to lower homebuying costs for millions of Americans. To boot, it comes at the expense of a politically powerful industry in a way that also summarizes his administration’s approach to the economy.
“President Joe Biden has recognized the need to rein in anticompetitive practices in the housing market as a cornerstone of the administration’s pro-competition agenda,” the progressive groups, led by Demand Progress, wrote in the Thursday letter to Attorney General Merrick Garland and Jonathan Kanter, who leads the department’s antitrust work. “The Antitrust Division’s scrutiny of the [National Association of Realtors’] harmful practices and broader agenda to expand housing opportunities are having a real impact.”
Earlier this year, the Justice Department helped to secure an agreement effectively ending a longstanding practice of American home sales: the 6% sales commission all but guaranteed to real estate agents negotiating home purchases. The agreement was negotiated by private attorneys for home purchasers who alleged the politically powerful National Association of Realtors, which covers most real estate agents in the nation, was violating federal antitrust law.
The lawsuits, one in Missouri and one in Illinois, alleged the association’s rules requiring a buying agent to make an offer of commission to selling agents inflated the fees homebuyers paid. The longstanding system meant a $400,000 house — roughly the median cost of a home in the United States — required sellers to pay $24,000 in commissions, a far higher cost than in other wealthy countries.
Those private lawyers and homebuyers were backed by a powerful public ally: the Biden administration’s Justice Department, which was investigating the Realtors association and anti-competitive practices in the real estate industry. The added scrutiny from the DOJ, lawyers and advocates said, helped solidify a victory which could save Americans billions of dollars annually and take a significant bit out of the cost of purchasing a home.
“When public and private enforcement works to address major problems, the American people always benefit,” said a private lawyer who worked on the cases and requested anonymity to speak frankly about the Justice Department’s role.
In a statement, an NAR spokesperson said the group does not set a standard commission.
“The rule that has been the subject of litigation requires only that MLS participants make an offer of compensation to other MLS participants. That offer can be any amount, including zero,” the spokesperson said, referring to the multiple listing services used by real estate agents to share information about properties for sale. “[NAR] policy expressly prohibits the fixing, controlling, recommending, or suggesting of commissions or fees, including any offer of compensation. NAR does not set commissions ― they are and continue to be negotiable.”
The success also sets up a direct contrast with former President Donald Trump’s friendly approach to the real estate industry, and showcases how the Biden administration’s aggressive approach to antitrust law — also seen in the challenges to major mergers and move to ban noncompete agreements — is already delivering major results for consumers.
Home prices have emerged as a sleeper issue in the 2024 race, with Trump attacking Biden over the issue and Biden fighting back with plans to make renting or buying a home more affordable. High interest rates have driven up housing costs already kept high by years of cities and towns not allowing sufficient housing construction. Biden is eager to get credit for lowering housing costs, proposing a $10,000 mortgage relief tax credit for families making less than $250,000 a year during his State of the Union address.
Home prices and rental costs have surged in the swing states of Arizona and Nevada in particular. In a Gallup poll last month, 14% of Americans said the cost of owning or renting a home was the biggest financial problem facing their family — more than those who cited the cost of health care, gas or taxes.
Biden, who is trailing Trump by consistent but surmountable margins in most public polling, has so far struggled to make a dent in Trump’s substantial lead on the economy. His campaign team has been hopeful his antitrust agenda — including battling so-called junk fees, banning noncompete agreements and stopping corporate consolidation — could prove a potent message to prove to voters that Biden is on their side.
Bharat Ramamurti, a former deputy director of Biden’s National Economic Council, said the new agreement on housing was one of the biggest victories for the president’s antitrust agenda, which aims to challenge an industry-friendly status quo and reverse more than four decades of corporate consolidation.
“The most powerful tool the administration has between now and the end of the year to show progress on bringing down home prices is clearly this settlement,” Ramamurti said of the agreement. “And it’s powerful because it gives a real-life example of how the competition agenda is lowering the prices people are paying everyday.”
Biden celebrated the agreement when it was first announced in March, though avoided directly mentioning the Justice Department’s role in pressuring the industry. “I’m calling on Realtors to follow through on lowering their commissions to protect homebuyers,” he said during a speech in Las Vegas, Nevada.
Now though, his campaign seems eager to draw a contrast with Trump.
“Joe Biden knows how hard middle-class families work to put food on the table — that’s why he’s fighting to lower housing costs, prescription drug prices, and health care premiums. But from his perch at Mar-a-Lago, Donald Trump will build on his tax cuts for billionaires and his decades-long record as an exploitative, discriminatory landlord to make it harder for working families to pay rent or buy their first home,” said Charles Lutvak, a spokesman for the Biden campaign.
The actions of the candidates’ respective Justice Departments add to the contrast: The Trump-era DOJ, in the waning months of his administration, reached a settlement with the Realtors association requiring only minimal changes to the group’s code of ethics and policies surrounding multiple listing services, the industry term for local associations of Realtors who share information on properties for sale.
Less than a year later, Biden’s Justice Department withdrew from the deal, saying the department “cannot be bound by a settlement that prevents our ability to protect competition in a market that profoundly affects Americans’ financial well-being.” It reopened the investigation into the industry, which is still ongoing. Last month, a judge rejected the Realtors’ attempt to reimpose the agreement.
But ahead of the election, the Trump campaign has predicted voters would blame Biden for high interest rates, which directly raise mortgage costs.
“On top of sky-high prices for rent, gas, and groceries, Bidenomics has made the American Dream of homeownership unreachable for families across the country. Under Joe Biden, interest rates and mortgage payments have hit record highs, and affordability has hit record lows for middle-class Americans,” said Karoline Leavitt, the campaign’s national press secretary. “Thankfully, President Trump has promised to cut spending, lower taxes, and drive down costs, and voters will welcome that relief when they retire Crooked Joe in November.”
The current statement is in line with Trump’s industry-friendly approach, with Trump even addressing the Realtors group during a Washington event in 2019. “When a young family needs room to grow; when a new job sparks a new adventure in a brand new beautiful city; when parents want to find the right neighborhood and schools for their children, Americans put our trust in you, our great Realtors,” he said at the time.
“NAR is a non-partisan organization, and we regularly invite the sitting U.S. President to speak at our event every year,” a spokesperson for the group said, adding: “We do not endorse or fund Presidential candidates.”
NAR’s influence in Washington, however, goes far beyond Trump. The group, with substantial membership in every state and congressional district, has long been one of the top lobbying and campaign donation spenders in Washington: The group has contributed more than $95 million to campaigns since the 1990s, occasionally even directly intervening in races with its own television advertisements.
CORRECTION: A previous version of this story said incorrectly that Donald Trump was the first president to address the Realtors group, in 2019. Multiple presidents of both major parties have participated at the association’s meetings over the past century.
