Late in 2020, the National Association of Realtors issued an unusual statement – an apology.

“NAR initially opposed passage of the Fair Housing Act in 1968, and at one time allowed the exclusion of members based on race or sex,” said the Washington-based group, which boasts over 1.5 million member real estate agents. “This discrimination was part of a systematic policy of residential racial segregation, led by the federal government and supported by America's banking system and real estate industry, and driven by practices like redlining.”

Speaking onstage at a public event, Charlie Oppler, the group’s then-president, added, "Because of our past mistakes, the real estate industry has a special role to play in the fight for fair housing.”

But just a few years later, the fight for equitable homeownership may have taken a step back. By decoupling the commission paid to buyer brokers from seller proceeds, the landmark class-action lawsuits brought against NAR and other large national brokerages on behalf of consumers have unintended consequences, advocates say.

The concern: Black buyers, who often come to the house hunt with the deck stacked against them, will be further disadvantaged by having to pay more money out of pocket for an agent to represent them – or will choose to go without representation in a transaction that’s expensive, confusing and laden with unfamiliar pain points.

Learn more: Best personal loans

“With the ability to purchase a home, a lot of times the barrier is the down payment and the closing costs,” said Amber Lewis, who owns New Era Real Estate Group in Cleveland. “With the new rules, asking our buyers to bring additional funds to the table to pay that commission becomes another barrier.”

What are the barriers to homeownership?

One of the biggest challenges for Black and other minority buyers is that many are not just first-time buyers, but the first among their generation in their families to purchase property. Just 45.3% of Black Americans are homeowners, compared to 74.4% for whites, Census data shows.  Thanks in large part to higher rates of homeownership, white Americans have $1.4 million in household wealth, on average, nearly six times that of Black families, at $227,554, according to the Federal Reserve's Survey of Consumer Finances.

“These communities, because they’ve been knocked out of homeownership opportunities in an unfair, unjust, and discriminatory fashion, don’t have a parent who has wealth built up in home equity,” said Lisa Rice, president of the National Fair Housing Alliance. “They can’t go to the 'Bank of Mom and Dad' to get money to pay the buyer’s agent. Because they are low-wealth, although not necessarily low-income, they also disproportionately have student loan debt.”

Many Black buyers also lack the informal wisdom that comes from shared experience, said Dr. Courtney Johnson Rose, president of the National Association of Real Estate Brokers, an organization of Black real estate professionals. In the biggest financial transaction most people make in a lifetime, having a support system to guide decisions on everything from mortgage rates to sump pumps is critical.

“This is a classic example of people who had a ladder built for them, climbed up the ladder, and now they’re pulling it up behind them,” Rice said.

Dream deferred?The 'American Dream' has always been elusive. Some wonder if it's still worth fighting for.

Adapting to change after new real estate rules take effect

The changes that went into effect Aug. 17 are ruffling some feathers around the country, with many housing market observers most concerned about the impact on homebuyers.

“Did our jobs just get a little harder? Yes, absolutely,” said Sabrina Brown, founder of Pink Key Real Estate, a brokerage in Fresno, California. “Did it make it more difficult for Black and brown communities? Yes, now there’s an additional layer of compensation. I think it’s going to scare them away from having a conversation about homeownership.”

NAR did not want the changes, but made them as a result of the settlements, Nate Johnson, the group’s head of advocacy, said in an interview. “We had to land somewhere in terms of satisfying the plaintiffs and also protecting the needs of consumers.”

In an email, Michael Ketchmark, the attorney who successfully sued NAR and several brokerages, told USA TODAY, “We examined this issue extensively and worked with consumer advocates for low-income and minority home buyers. Every state has assistance programs for first-time homebuyers to cover down payments. Under the old rules, minority buyers seldom used these programs because the money was being taken from the homeowners. This will change under the free market.”

Lawyers with Cohen Milstein and Hagens Berman Sobol Shapiro, the other major plaintiff’s attorneys, did not respond to requests for comment.

'Pocket listings' raise concerns

While changes to the commission structure have grabbed most of the attention, many observers are also concerned about the erosion of the centralized databases that previously housed all information about real estate listings.

A confirmation that the seller would pay the buyer’s broker was generally included on most listings. Now that piece of information may not be included, which will force buyers and their brokers to reach out to each seller or their agent individually.

“Say there’s a home on the market,” Rose said. “Two offers come over and now it’s the seller’s discretion which to take.” In many situations, the more attractive offer will be one with a mortgage that doesn’t take as long to process, or one that’s all cash. In fewer, but not zero, situations, it may be one from an agent who’s part of the same social circles as the listing agent.

“I am concerned,” said Denise Franklin, a long-time real estate agent in Greenville, South Carolina. “We may see more fair housing complaints and lawsuits.”

Franklin works with many first-time buyers who obtain mortgages backed by government agencies like the Federal Housing Administration. Those loans, which are designed to reach marginal borrowers, can take longer to process and may be more prone to hiccups than those backed by Fannie Mae and Freddie Mac. In 2023, 1 out of 5 FHA-insured mortgage loans was made to a Black borrower.

Some sellers’ agents may choose to avoid such situations altogether, and keep listings amongst themselves rather than share them widely, many advocates think.

“There are homes now in certain communities that will never go on the market. We will never get to see them. They’re just being marketed amongst a network. Guess what? Black professionals are not part of that network,” NAREB’s Rose said.

The practice of keeping such “pocket listings” defies the logic of scoring a higher sale price via a broader audience, NAR’s Johnson said, not to mention violating fair housing rules.

Still, “fair housing groups have been fighting pocket listings for decades and decades,” Rice told USA TODAY. “Discrimination is not logical. We need a fully transparent system for all houses on the market, that all real estate agents can see what’s available and what’s on the market.”

One policy solution might be to have an agency like the Department of Housing and Urban Development maintain listings, she suggested. FHA and some other mortgage programs are part of HUD.

In a statement to USA TODAY, Julia Gordon, HUD’s assistant secretary for housing, said, “HUD is closely monitoring the impact of National Association of Realtors settlement – and the potential for buyers of color and low-income buyers to be disadvantaged by the new practices. We remain laser-focused on addressing the barriers that prevent people of color and low-income people from achieving homeownership, including how the lack of generational wealth among some buyers of color can prevent them from meeting the funding requirements needed to purchase a home. 

What happens next?

For Brown, the real estate agent in Fresno, seller agents shouldn’t just market their listings more broadly – they should also be nudging their clients to offer as much compensation to the buyer’s broker as possible, in order to reach the widest possible audience.

“We are not competition, we are in this together to do what’s best for everyone," she said. "Buyers want to buy and sellers want to sell and we are in the middle helping them negotiate that.”

NAR and others maintain that by forcing buyers to have honest conversations with their brokers, the value of the real estate transaction will become clearer.

“Buyers will be better prepared and have a better understanding of what the buying process looks like,” Johnson said. “From an agent’s standpoint, it creates the opportunity to become better at demonstrating our value proposition. If we’re not doing that, it forces the buyer to go elsewhere.”

Among fair housing advocacy groups, Rice said, discussions are underway about how best to take action.

While few housing observers would have considered the MLS ideal, "at least it lent a high degree of transparency in terms of what was on the market. We cannot decouple the seller’s commission with the buyers’ commission. We need to have a construct where the sellers pay for the buyers’ commission.”

Meanwhile, some agents, like Denise Franklin, are already seeing people exit the market.

“We’ve had others say, 'We’re just going to hold off right now,'" Franklin said. "One of our team members took a home off the market because they said there’s just too much confusion.”

Franklin added: “We’ve gone back, we haven’t gone forward.”