Source: Redfin —
- Sellers are offering to cover the cost of repairs, mortgage-rate buydowns and closing costs as rising interest rates dampen homebuyer demand.
- Pandemic boomtowns and pricey coastal markets, including Phoenix and Seattle, have seen the biggest increases in concessions.
- A record 13% of home sales include a price cut and a final sale price below the list price in addition to a concession.
Home sellers gave concessions to buyers in 45.5% of home sales recorded by Redfin agents during the three months ending February 28, up from 31.1% one year earlier. That’s the highest share of any three-month period in Redfin’s records, which date back to June 2020.
This is according to data submitted by Redfin buyers’ agents across the U.S. A concession is recorded when an agent reports a seller provided something that helped reduce the buyers’ total cost of purchasing the home. For the purposes of this report, a seller lowering the list price of their home does not count as a concession.
Concessions have become increasingly common because rising mortgage rates and stubbornly high home prices have caused many buyers to put their plans on hold, which has motivated sellers to throw in freebies to attract the buyers who remain. Redfin agents report that sellers are offering to fund repairs, cover closing costs and pay for bidders to buy down their mortgage rates.
The housing market has done a 180 since 2021, when a surge in homebuyer competition fueled by rock-bottom mortgage rates forced buyers to offer everything but the kitchen sink to win. The average 30-year-fixed mortgage rate is now 6.73%, up from 3.85% a year ago, which has increased the typical homebuyer’s monthly mortgage payment by nearly $600.