New CEO at Buffett's HomeServices says buyers, sellers can handle tariffs, changes
By Jonathan Stempel
OMAHA, Nebraska (Reuters) -The new chief executive of Berkshire Hathaway's HomeServices of America said worries about the impact of tariffs on mortgage rates are weighing on home buyers and sellers, but were unlikely to significantly dent sales of existing homes.
"When mortgage rates are fluctuating because the underlying economy is fluctuating, it causes buyers and sellers to stay on the fence," Chris Kelly, who took over the largest U.S. residential real estate brokerage on April 15, said in a recent interview.
Higher borrowing costs contributed to a greater-than-expected 5.9% drop in March U.S. sales of existing homes, to a seasonally adjusted 4.02 million unit annual rate, with more weakness likely as tariffs fan fears of a recession.
"The high degree of volatility we've seen in the last couple of months is giving buyers and sellers a little bit of pause," Kelly said. "But there are still 4 million people who are going to make a move this year."
HomeServices is a unit of Berkshire Hathaway Energy, which is part of Warren Buffett's conglomerate, and owns or franchises more than 2,200 brokerage offices with over 82,000 agents.
It lost money in 2024, largely from its $250 million settlement of antitrust litigation accusing the National Association of Realtors and brokerages of inflating commissions.
HomeServices was the last defendant to settle the landmark case, though Berkshire Hathaway Energy faces related claims.
The brokerage commission settlement ended the practice of having sellers pay commissions, typically 5% to 6%, to their agents, who would split them with buyers' agents.
Splits would be communicated over private databases known as multiple listing services (MLS), which only agents would see. Sellers claimed this was secretive and inflated closing costs.
The NAR's Clear Cooperation Policy requires agents to list properties on their MLS within one business day of marketing the properties to the public.
Supporters say it adds transparency and provides equal access to listings, while critics say it restricts sellers' ability to choose marketing strategies.
"That's where the current battlefront is: what happens if more properties are listed as exclusives, or marketed with more limited exposure," Kelly said. "From our perspective, the vast majority of properties benefit from the widest exposure possible, which means putting it in the MLS."
He added that "We always want the consumer to have a high degree of clarity on the fee and commission structure."
HomeServices has curbed its once aggressive appetite to buy brokerages to fuel growth, and Kelly said it will likely emphasize "tuck-ins" of brokerages that might struggle to compete on their own.
But he also said HomeServices has diverse revenue streams from mortgages, title and insurance, citing its stake in nationwide underwriter Title Resources Group, which can cushion the blow when one segment falters.
Kelly, 49, joined HomeServices' network in 2007 when he left private law practice to become general counsel at Kansas- and Missouri-based ReeceNichols.
He later moved to the parent company. Kelly reports to Berkshire Vice Chairman Greg Abel, who is expected to succeed Buffett as chief executive.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
19 minutes ago
- Yahoo
Tariffs on canola seen supercharging Canadian farmers' shift to spring wheat
By Ed White WINNIPEG, Canada (Reuters) -In the U.S. Great Plains, where spring wheat once dominated fields, farmers are turning away from the crop. But across the border in Canada, the pinch and prospect of Chinese and U.S. tariffs on canola have prompted farmers to pick up the slack on wheat. Farmers are still putting their crops in the ground, so it is not yet possible to know the extent of the acreage shift into wheat. However, early signs, based on interviews with more than 20 Canadian and U.S. farmers, agricultural analysts, traders and industry organizations, show that the grain primarily used to bake bread is proving to be a big winner in this year's global trade war. China's 100% tariffs on Canadian canola meal and oil and its threat to impose duties on canola seed, amid President Donald Trump's broader global trade war, have rattled Canadian farmers, who since 1990 had nearly quadrupled their canola acres before paring back in recent years because of growing problems with drought, high production costs and crop diseases. Now, tariffs are expected to accelerate the likelihood that thousands of farmers could further cut back, adding up to hundreds of thousands or even millions of acres less canola, and more wheat, farmers and analysts estimated. "There is going to be a massive switch," said Jerry Klassen, a Manitoba farmer and market analyst with Resilient Capital. He has switched hundreds of acres on his own farm from canola to spring wheat this year and thinks like-minded farmers will do the same. Reuters' reporting on fallout from tariffs in grain markets illustrates how global trade turmoil is causing the neighboring countries to diverge on spring wheat production. Canada's rebounding supply of wheat has kept prices down for millers who fuel global bread demand as well as consumers. The shift to Canadian fields has also offset some worry about the long-term decline in U.S. production area. Politicians in Canada are funding and supporting the shift toward greater wheat production as a way to shield the thinly-populated agricultural export powerhouse of Western Canada from foreign pressure. And farmers have their own motivation: improved wheat varieties have boosted the grain's profitability. Adam Dyck of U.K. breadmaker Warburtons in Winnipeg said some Canadian farmers had tripled their production to 90 to 100 bushels per acre since the 1990s. The shift toward wheat reflects canola's vulnerability to tariffs. Most of the C$14.5 billion ($10.59 billion) 2024 Canadian canola exports go to the U.S. and China, with the U.S. biofuels market consuming most of Canada's canola oil while China buys most of Canada's seed exports to crush for edible oil and animal feed, while wheat is sold to dozens of countries around the world. Some Canadian farmers are expecting that in a prolonged trade war, globally-diverse wheat is a safer bet than U.S. and China-dependent canola. In 2024 Canada shipped two-thirds of its total canola seed exports to China, and 95% of total canola oil exports of 3.5 million tons to the U.S. But Canada's wheat exports were "highly diversified," the U.S. Department of Agriculture noted. The world's wheat and canola markets will be guessing for weeks about Canadian farmers' final decisions on what to seed. Statistics Canada's next report is scheduled for June 27, and the numbers for that report are being collected before farmers have finished planting. 'POVERTY GRASS' Scott Huso, a farmer in Aneta, North Dakota, said that across the northern Great Plains, stretching from Minnesota to the Montana Rockies, farmers have been planting less wheat in favor of crops like corn and soybeans, which are generally more profitable. University of Minnesota data found that last year, farmers in central Minnesota earned hundreds of dollars in operating profit per acre with corn and soybeans, but lost money on spring wheat in 2024. "Wheat, you're not making money on it," Huso said. U.S. total hard red spring wheat production hasn't changed much since the mid-1990s because of substantial improvements in the amount grown per acre. However, total acres are in long-term decline, dropping from 15-20 million acres in the mid-1990s to 13-15 million in the mid-2000s to 10-13 million in the mid-2010s. The U.S. Department of Agriculture said on March 31 that it expects hard red spring wheat acreage in 2025 to drop to 9.4 million acres -- the lowest since 1970. Yet spring wheat is in great demand from the world's millers and bakers. Its high protein content allows it to be used as the base for top-quality bread flour, or as something to blend with lower-quality, cheaper wheats. The U.S. and Canadian plains are the most reliable major source of the world's high-quality spring wheat. Yet that doesn't always lead to the kind of premium prices U.S. farmers might need to justify growing the crop, with steady Canadian supplies and those from overseas competitors like Russia keeping millers comfortable enough to avoid bidding wars, a frustration for many U.S. farmers like Huso. "You just can't convince guys to love wheat these days," said Huso, a member of the North Dakota Wheat Commission. Committed wheat growers like him and organizations like the commission and export-focused U.S. Wheat Associates are trying to convince buyers to pay higher prices and breeders to produce better wheat crop varieties to help wheat compete for U.S. farmers' fields. It's been an uphill struggle. In Canada, the mood is different. Rather than getting knocked out of the crop roster, more farmers are warming to wheat. In May, farmer Korey Peters finished seeding 1,700 acres of spring wheat on his farm near Winnipeg. With new varieties providing more crop per acre, and canola costly and hard to grow profitably in his area, he said he's been putting more and more of his land into wheat and corn. "I know some people call it 'poverty grass,' but it works for us," Peters said. ($1 = 1.3691 Canadian dollars) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30 minutes ago
- Yahoo
Analysis-Argentine leader Milei licking his chops ahead of October elections
By Nicolás Misculin BUENOS AIRES (Reuters) -Argentina's firebrand right-wing President Javier Milei has largely tamed runaway inflation with a ruthless austerity plan and he aims to solidify power when his party and its allies take on a divided opposition in legislative elections in October. The trash-tweeting, shaggy-haired economist, who famously handed tech billionaire Elon Musk a chainsaw at an event in Washington earlier this year, has overseen a steady dollar-peso peg but relies on legislative allies in Congress to pass his agenda. Many of the changes he has implemented have been through presidential decrees, like his ideological ally, U.S. President Donald Trump, who called Milei his favorite president. Voters will choose about half the seats in the lower chamber of Argentina's Congress and a third of the upper Senate on October 26. A big victory would not give Milei a legislative majority, but it would offer him leverage to make deals to sell off government-owned companies, cut social spending, change tax and labor policy and embrace social conservatism. That plan is in stark contrast to the program of the parties that are the ideological descendants of General Juan Peron, who ruled the country from 1946-1955 and 1973-1974, and his wife Evita. Their governments nationalized industries, unveiled pro-labor policies and rolled out social programs including free health care. The economic stability spurred by Milei, who took power in late 2023 and quickly slashed spending as part of a shock therapy program to pull the South American country out of a deep crisis, has not translated into across-the-board improvements. Prices of basic goods like jeans and tennis shoes are reportedly double what they are in other parts of the Americas. Pensioners continue to protest the cost of living, and anger over the relatively poor salaries of healthcare workers at a respected pediatric hospital has turned into a months-long saga. Nearly 40% of Argentines remain in poverty, and many of them reject Milei's policies. "I'm not a Peronist, but I'll vote for them because I'd vote for anyone before Milei," said Jorge, a 42-year-old "cartonero" who collects cardboard for recycling, an extremely poor living. The man, who declined to give his last name, said one of his four children was treated at the pediatric hospital where staff are protesting. Posing another threat to Milei's popularity is the possibility that he may in coming months have to further tighten economic policy to meet the terms of a $20 billion International Monetary Fund loan that has boosted Argentina's reputation among investors, whose dollars the country desperately needs. 'RUPTURE IS INEVITABLE' Up for grabs in the election is the vast province surrounding the capital, Buenos Aires, which is the geographic heart of Peronism and home to 40% of the country's voters. A government source told reporters Milei has vowed to defeat Peronist Governor Axel Kicillof there. Milei's candidate unexpectedly placed first in a recent Buenos Aires local election, and consulting firm Observatorio Electoral shows Milei's Libertad Avanza party with a slim 37%-36% advantage over the center-left Peronists. Nationally, 42% of voters favor Milei against 23% for the Peronists. Beating the standard-bearers of Juan Peron's legacy would have seemed impossible a few years ago, but with inflation down to a projected 30% this year, from 118% last year, and Milei credited with cutting corruption, some voters are ready to give the political firebrand more power. "I'll vote for Milei again because he's achieved a degree of normality in the economy," said Federico Segovia, a 22-year-old university student who blamed the last Peronist president, Alberto Fernandez, for leaving the economy in disastrous shape. A recent survey by the consulting firm Synopsis found that the share of those who viewed Milei positively rose to 43.4% in May from 40.9% in April. Perhaps the biggest wind in Milei's sails comes from the power struggle that has pitted Kicillof and his one-time mentor, former President Cristina Fernandez de Kirchner. Kicillof, who served as economy minister in Fernandez de Kirchner's government from 2013 to 2015, is expected to run for president in the 2027 election. "The rupture is inevitable," a Peronist source told Reuters. The two opposition politicians are still debating whether they will join forces for the congressional elections. "If there is no agreement for the legislative elections and Peronism is divided, La Libertad Avanza will win the elections in the province of Buenos Aires," the source said. Milei, meanwhile, has patched over divisions with his closest ideological neighbor, agreeing to offer a combined list of candidates with the center-right PRO party. The Peronists make up the largest party in Congress and have dozens of governors and mayors across the country. Observatorio Electoral pollster Julio Burdman, however, thinks that power base won't be enough to stop Milei's forces. "The ruling party has all the conditions" to win the most votes, he said. "I can't imagine any other result."
Yahoo
32 minutes ago
- Yahoo
Canada to announce new security and defence investment plan, Globe and Mail reports
(Reuters) -Canadian Prime Minister Mark Carney will unveil a new security and defence investment plan on Monday that would enable Canada to meet NATO's 2% military spending target this fiscal year, the Globe and Mail reported, citing two senior government sources. The spending increase, worth billions of dollars, will allow Canada to meet NATO's 2% target in the fiscal year ending next March and exceed it in future years, the report said. NATO's current defence spending goal of at least 2% of GDP is met by 22 of its 32 members. Canada was near the bottom of the list in 2024, according to estimates published by the alliance. The plan will include higher pay for members of the Canadian Armed Forces, new aircraft, armed vehicles, ammunition, new drones and more sensors to monitor the sea floor and the Arctic, the Globe and Mail said. Reuters could not immediately confirm the report. The Prime Minister's Office did not immediately respond to a request for comment outside regular business hours. The spending announcement would come days before a June 24-25 summit of NATO leaders. Reuters reported last month that NATO chief Mark Rutte had proposed alliance members should boost defence spending to 3.5% of GDP and commit a further 1.5% to broader security-related spending to meet U.S. President Donald Trump's demand for a 5% target.
