Homesellers are offering more concessions to woo buyers as a new report from Redfin found45.5% of homes sold on their platform featured some sort of concession.
That number is the highest share of any three month period since June 2020. A year ago, the rate of concessions was 31.1%.
Concessions have become increasingly common due to rising interest rates, which show no signs of slowing, and home prices which have yet to meaningfully decline have put many buyers plans on hold prompting sellers to throw in freebies to attract the buyers 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 experienced great changes since the height of 2021; now that the 30-year fixed-rate mortgage is up to 6.73% up from 3.85% over the same period last year. This has increased the typical homebuyers monthly mortgage payment by nearly $600.
“Buyers today are way more demanding and selective. They’re willing to wait to find the perfect house, which wasn’t the case during the pandemic homebuying boom,” said Elena Fleck, a Redfin real estate agent in Palm Beach, Florida. “During the peak of Covid, it took two to three days to sell anything regardless of the condition, location, or square footage. Now, a home that's not perfect may stay on the market for three to four months if the seller doesn’t throw in something to sweeten the deal.”
Fleck continued: “Any home with a roof that’s over eight years old is just sitting—buyers don’t want to put any additional funds into repairs. I had a few sellers offer credits for new roofs to close the deal. We’re also seeing more buyers ask for credits toward their closing costs.”
According to Redfin, sellers are also most likely to be slashing prices to entice buyers—a record 20.6% of homes sold on their platform included both a concession and a listing-price decrease.