Company: HOUS
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001398987-25-000020
Chunk: 209

Company: Anywhere Real Estate Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 209
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ordability. The combination of higher mortgage rates and inflation has substantially increased the cost of homeownership. This situation is further exacerbated by the significant rise in home prices, driven by inventory constraints and the "lock-in effect" where current homeowners are reluctant to sell due to their existing low mortgage rates. 

Future periods may see further negative impacts on housing affordability due to persistent inflation and potential increases in mortgage rates. Rising homesale prices, coupled with the escalating costs of homeowners and flood/other types of disaster insurance, are expected to continue straining affordability. Additionally, further declines in housing inventory, stagnant or declining wages and other economic challenges such as labor market fluctuations and policy uncertainties, could exacerbate the situation.

Inventory & Turnover. Continued declines in inventory have and may continue to result in insufficient supply to meet demand. Housing inventory levels have been a persistent industry-wide concern for years, particularly in certain sought-after geographies and at lower price points. Additional inventory pressure arises from potential home sellers choosing to stay with their lower mortgage rate rather than sell their home, periods of slow new housing construction, real estate investment firms that purchase homes for rental use, and alternative competitors. These pressures have led to a significant increase in the average sales price over the past two years.

Recruitment and Retention of Independent Sales Agents; Commission Income. Recruitment and retention of independent sales agents and independent sales agent teams are critical to the business and financial results of a brokerage, including our company owned brokerages and those operated by affiliated franchisees. On a year-over-year basis, independent sales agents affiliated with our company owned brokerages, as well as independent sales agents affiliated with our U.S. franchisees, experienced modest net declines in 2024 and 2023, which we believe is consistent with a broader industry trend of less productive agents leaving the profession due to challenging market conditions.

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The aggressive competition for the affiliation of independent sales agents in this industry continues to make recruitment and retention efforts at both Franchise Group and Owned Brokerage Group challenging, particularly with respect to more productive sales agents. These competitive market factors along with other trends (such as changes in the spending patterns of independent sales agents, as more agents purchase services from third parties outside of their affiliated broker) are expected to continue to put upward pressure on the average share of commissions earned by independent sales agents. If independent sales agents affiliated with our company owned brokerages are paid a higher proportion of the commissions earned on a homesale transaction or the level of commission income we receive from a homesale transaction is otherwise reduced,