New Research Finds Brokerages Regain Some Profitability in 2025, Largely by Cutting Costs

Expense reductions, not sales growth, drove modest improvement as more firms moved back into the black.

BOSTON, Feb. 3, 2026 /PRNewswire/ -- Real estate brokerages across the United States showed signs of improving profitability in 2025, according to new benchmark research released this week by AccountTECH. The study, which analyzed financial results from 157 brokerage companies, found that profit margins improved modestly compared with 2024, largely because firms reduced expenses rather than grew revenue.
The research examined median EBITDA margins — profitability measured as earnings before interest, taxes, depreciation, and amortization expressed as a percentage of income. The AccountTECH approach of examining profit and expenses as a percentage of income (instead of actual dollars of profit ) allows companies of vastly different sizes to be compared on an equal footing. Margins relative to income are also a revealing way to evaluate a brokerage's capacity to manage expenses in proportion to their revenue.

While margins improved for a second straight year, they remained thin by historical standards and well below levels seen earlier in the decade.
AccountTECH describes 2025 as the year of the "efficiency wedge," a period in which many brokerages became profitable again despite flat sales and shrinking agent counts. Traditional drivers of profit growth, such as higher transaction volume or increasing agent count, were largely absent. Sales volume was essentially unchanged from the prior year, agent counts declined, and the cost of sales (commissions paid to agents) rose for the first time in many years, putting pressure on gross profit.
Even so, overall profitability improved. The reason, the study found, was aggressive cost cutting. Brokerages reduced expenses so significantly that the savings more than offset the decline in gross profit margins.

More Firms Became Profitable
The median EBITDA margin rose to 1.68 percent of income in 2025, up from 1.35 percent in 2024. Despite the improvement, typical profit margins remain far below those recorded in 2021, when the median reached 4.31 percent, as well as 2022 levels.

Notably, a larger share of brokerages operated profitably in 2025. About 70 percent of companies were profitable, up from roughly 61 percent the year before. That marked a clear turnaround from 2023, when fewer than 57 percent of firms earned a profit.

Unprofitable companies showed the most dramatic improvement. Among firms that still lost money, median margins improved from -1.87 percent in 2024 to -1.39 percent in 2025. According to AccountTECH, gains among these underperforming firms accounted for a disproportionate share of the overall EBITDA margin recovery.

Companies that were already profitable also saw gains, though more modest ones. Median margins for this group increased from 3.22 percent to 3.37 percent, remaining well below historical peak profitability.

Costs, Not Revenue, Drove the Shift
The research makes clear that improvements in 2025 were expense-driven, not the result of stronger gross profit margins. The cost of sales increased during the year, reducing median gross profit from 19.07 percent to 18.14 percent of income.

Operating expenses, however, fell more sharply, declining from 17.52 percent in 2024 to 16.39 percent of income in 2025. The net effect was a 0.33 percentage-point improvement in median EBITDA margin, even as pressure on gross margins continued.

Expense reductions were seen across both labor and non-labor categories, with the largest relative improvement coming from non-wage operating costs.

A Longer-Term View
Looking across five years of data, AccountTECH identified a clear structural pattern. From 2021 through 2023, decreases in profitability were driven primarily by rising operating expenses. In 2024 and 2025, profitability improvements were driven by tighter expense control, even as the cost of sales continued to rise.

AccountTECH's research highlights that 2025 represents a year of partial recovery and normalization, not a return to the higher profit margins that characterized earlier market cycles.

"The 2025 data confirms what many brokerage leaders have felt on the ground," said Mark Blagden, CEO of AccountTECH. "Profit margins are stabilizing, but the recovery is uneven. The most important shift this year wasn't higher top-end profits, but the fact that fewer firms are losing money — and those that are unprofitable are losing less."

AccountTECH's findings highlight the value of clear, consistent financial reporting in helping brokerage leaders understand where profits are improving and where pressure remains, particularly during extended periods of thin margins.

About the Research
The study is part of AccountTECH's ongoing financial benchmark program for the residential real estate brokerage industry. The 2025 analysis includes full-year financial results from 157 brokerages, benchmarked consistently over five years using standardized accounting definitions.

About AccountTECH
AccountTECH provides specialized accounting systems, financial intelligence, and benchmarking services for real estate brokerages. Serving thousands of offices across North America and Canada, the company combines enterprise-grade accounting infrastructure with industry-specific analytics to deliver clear insight into brokerage performance.
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SOURCE AccountTECH