The new chief executive of Berkshire Hathaway’s HomeServices of America, Chris Kelly, stated that concerns about the impact of tariffs on mortgage rates are weighing on homebuyers and sellers. However, he believes these concerns are unlikely to dent sales of existing homes significantly. Kelly said, “When mortgage rates are fluctuating because the underlying economy is fluctuating, it causes buyers and sellers to stay on the fence.” He acknowledged that higher borrowing costs contributed to a greater-than-expected 5.9% drop in March U.S. sales of existing homes, to a seasonally adjusted annual rate of 4.02 million units.
More weakness is likely as tariffs fan fears of a recession. “The high degree of volatility we’ve seen in the last couple of months is giving buyers and sellers a little bit of pause,” Kelly said. “But there are still 4 million people who are going to make a move this year.”
HomeServices, a unit of Berkshire Hathaway Energy, lost money in 2024, primarily due to its $250 million settlement in antitrust litigation.
The litigation accused the National Association of Realtors and brokerages of inflating commissions. HomeServices was the last defendant to settle the landmark case, though Berkshire Hathaway Energy faces related claims. The brokerage commission settlement ended the practice of having sellers pay commissions, typically 5% to 6%, to their agents, who would split them with buyers’ agents.
Tariffs affecting mortgage market stability
Splits would be communicated over private databases known as multiple listing services (MLS), which only agents would see. Sellers claimed this was secretive and inflated closing costs.
The NAR’s Clear Cooperation Policy requires agents to list properties on their MLS within one business day of making the properties public. Supporters say it adds transparency and provides equal access to listings, while critics argue that it restricts sellers’ ability to choose their marketing strategies. Kelly said, “That’s where the current battlefront is: what happens if more properties are listed as exclusives, or marketed with more limited exposure.
From our perspective, the vast majority of properties benefit from the broadest exposure possible, which means putting it in the MLS.” He added that “We always want the consumer to have a high degree of clarity on the fee and commission structure.”
HomeServices has curbed its once aggressive appetite to buy brokerages to fuel growth. Kelly said it will likely emphasize “tuck-ins” of brokerages that might struggle to compete on their own. However, he also noted that HomeServices has diverse revenue streams from mortgages, title, and insurance, citing its stake in nationwide underwriter Title Resources Group, which can cushion the blow when one segment falters.
Kelly, 49, joined HomeServices’ network in 2007 when he left his private law practice to become general counsel at ReeceNichols, a Kansas- and Missouri-based Company. He later moved to the parent company and now reports to Berkshire Vice Chairman Greg Abel, who is expected to succeed Warren Buffett as chief executive.
Image Credits: Photo by Erim Berk Benli on Unsplash
