July 2025 Real Estate Brokerage Labor cost Index

LaborCost Efficiency Diverges widely Between Profitable and Unprofitable Real Estate Brokerages

BOSTON, Sept. 3, 2025 /PRNewswire/ -- AccountTECH, a leading provider of accounting software and services for real estate brokerages since 1991, has released its July 2025 Labor Cost Index. The index benchmarks labor costs as a percentage of income for U.S. residential real estate companies, offering a standardized measure of expense discipline across the industry.

The AccountTECH Labor Cost Index for July 2025 was 5.12565%, reflecting the median labor cost relative to income among brokerages with GAAP-compliant financial reporting.

Historical Comparison: Labor Cost Index for July

Key insights:

• July 2025 index is 98% of July 2024, signaling a modest reduction.
  
  
• Index equals July 2022 levels, and is 124% of July 2020.
  
  
• The index peaked in 2017, declined to a 2020 low, rebounded through 2023, and has since moderated.

Profitable vs. Unprofitable Brokerages

Profitable Companies

For July 2025, profitable firms reported a labor cost index of 4.7418%. Since 2019, profitable companies have maintained labor costs at or below 5% of income, underscoring disciplined expense control.

Unprofitable Companies

Unprofitable companies posted a July 2025 labor cost index of 8.6392%. With July's median gross profit margin at 18.24% and the July non-wage expense index at 7.63%, AccountTECH analysis finds it is nearly impossible for brokerages with labor costs above 10.6% of income to achieve breakeven.

Labor Cost per Agent

In July 2025, the AccountTECH Labor Cost per Agent Index was $349.19, a sharp decrease from July 2024's peak of $416.65, which remains the highest per-agent spend in the history of this study.

Commentary

"July's labor cost index shows that profitable brokerages continue to hold expenses under control, maintaining costs under 5% of income," said Mark Blagden, CEO of AccountTECH. "In contrast, firms with elevated labor costs remain locked out of profitability. The data makes clear: expense discipline is now the most critical determinant of success in real estate brokerage operations."

About the AccountTECH Index

The AccountTECH Real Estate Brokerage Financial Health Index Series provides monthly benchmarks across key financial indicators, including EBITDA margin, gross profit margin, and labor cost. With three decades of specialized accounting focus in real estate, AccountTECH offers one of the most comprehensive and trusted datasets in the industry.

Authored by: Mark Blagden, CEO of AccountTECH
www.accounttech.com | (978) 947-3600

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SOURCE AccountTECH