WASHINGTON—The main trade association for real-estate agents on Monday sought to block a broad Justice Department investigation of industry practices, after an antitrust settlement between the two sides fell apart this summer.

The move underscores the growing pressure the residential real-estate industry is experiencing, mainly over the estimated 5% to 6% commissions that agents still receive from many home sales despite technology-driven shifts in house hunting and other changes.

The Justice Department said in July that it was withdrawing from a proposed Trump administration settlement with the National Association of Realtors over alleged anticompetitive practices. Department staff attorneys believed the original investigation was too narrowly focused and the proposed settlement too favorable to the industry because it didn’t sufficiently address the way buyer-broker commissions are set. They also feared language in the settlement could block the new investigation they planned to launch.

The NAR said in a statement on Monday that the Justice Department withdrawal from the settlement “is a breach of the agreement and the law.”

The NAR filed a “petition to quash a request by the Department of Justice that reneges on the terms of a settlement agreement that was approved by the DOJ in November 2020.” 

The NAR’s filing in federal district court in Washington, D.C., seeks to block or modify a civil subpoena from the Justice Department that the NAR received in early July, soon after the Justice Department withdrew from the settlement.

“NAR remains hopeful the DOJ will honor its agreement,” said NAR President Charlie Oppler, a Realtor from Franklin Lakes, N.J. and chief executive of Prominent Properties Sotheby’s International Realty. “We also remain committed to advancing and defending independent and local real estate organizations that provide for greater economic opportunity and equity for small businesses and consumers of all backgrounds and financial means.”

The Justice Department said in July officials were within their legal rights to withdraw from the earlier settlement.

The current Justice Department investigation began earlier this year. After the change in administrations, the Justice Department was eager to pursue a broader look at the real-estate industry. But the NAR balked, arguing the settlement might preclude it.

The department then unilaterally withdrew the pact and reopened its probe to conduct a more detailed, sweeping examination of industry practices. The department is concerned that an array of practices create a closed marketplace for the buying and selling of homes, locking in higher fees and preventing maverick companies and agents from offering lower-cost models.

These concerns come amid potentially disruptive changes in the industry, accelerated by the Covid-19 pandemic, which saw, for example, a boom in virtual models for touring homes and navigating the real-estate market.

As pressure mounts on the industry, President Biden also has pushed the Federal Trade Commission to launch its own moves. Mr. Biden said in a recent executive order targeting competition problems that the FTC should consider rules to curb “unfair tying practices or exclusionary practices in the brokerage or listing of real estate.”

The industry also faces threats from major private antitrust suits against the NAR and other industry defendants. Two major cases, which both challenge real-estate commission rules and practices, have survived initial procedural challenges and become worries for the industry.

NAR officials said the private class-action lawsuits have no merit.

News Corp,
owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.

Write to John D. McKinnon at john.mckinnon@wsj.com and Brent Kendall at brent.kendall@wsj.com