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

                    Year                        Labor Cost Index
                                                 (%)



        2025                                            5.12565



        2024                                             5.2312



        2023                                            5.63725



        2022                                            5.14705



        2021                                            4.73485



        2020                                            4.14585



        2019                                             5.6115



        2018                                            6.18505



        2017                                             7.2376



        2016                                             5.5201

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.

       Year Profitable Labor Cost Index
             (%)



 2025                           4.7418



 2024                          5.03795



 2023                           4.8278



 2022                           4.1038



 2021                          4.58045



 2020                           3.7938



 2019                          5.06025



 2018                           5.6682



 2017                           5.5111



 2016                           5.3935

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.

       Year Unprofitable Labor Cost Index
             (%)



 2025                             8.6392



 2024                             8.6392



 2023                             7.8718



 2022                             8.8456



 2021                           15.64705



 2020                           13.66315



 2019                             13.594



 2018                           13.03425



 2017                            7.87895



 2016                             10.832

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

For sales inquiries, please contact:
Theresa Hurt - theresa@accounttech.com - (978) 710-0071

Media contact:
Rizza Batol - rizza@accounttech.com - (978) 947-3600

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SOURCE AccountTECH