Skip to main content

Redfin: Nearly Half Of Home Sellers Are Making Concessions

Keith Griffin
Mar 15, 2023
Home repair concessions

In addition, a record 13% of sales include price cuts and final sales below list price.

Home sellers gave concessions to buyers in 45.5% of home sales recorded by Redfin agents during the three months ending Feb. 28, according to a new report from Redfin, the technology-powered real estate brokerage.

That’s the highest share of any three-month period in Redfin’s records, which date back to June 2020, and compares with 31.1% one year earlier. This is according to data submitted by Redfin buyers’ agents across the U.S.

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.

“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.”

Home Sellers Also Slashing Prices
In addition to offering more concessions, sellers have become increasingly likely to sell their home for less money than they originally hoped for. That can happen when a seller cuts their asking price, accepts an offer below the asking price or both.

A record 25.2% of home sales recorded by Redfin buyers’ agents included both a concession and a final sale price below the list price during the three months ending Feb. 28. A record 20.6% included both a concession and a listing-price cut that occurred while the home was on the market. A record 13% included all three.

Seattle Sees Biggest Concessions Increase
In Seattle, sellers gave concessions to buyers in 51.6% of home sales during the three months ending Feb. 28, up from 20.1% a year earlier. That’s the largest percentage-point increase among the 22 U.S. metropolitan areas for which there was sufficient data. Next came Las Vegas (30.6 ppts), Denver (26.2 ppts), San Diego (23.3 ppts) and Phoenix (22.4 ppts).

There were only two metros in which concessions were less common than they were a year earlier: Austin, TX (-3 ppts) and Chicago (-2.1 ppts).

Concessions Most Common In Vegas
In Las Vegas, sellers gave concessions to buyers in 77.4% of home sales during the three months ending Feb. 28—the highest share among the metros Redfin analyzed. Next came San Diego (74.8%), Sacramento, Calif., (70.9%), Phoenix (63.7%) and Denver (60.9%).

In New York, sellers gave concessions to buyers in 16.7% of home sales—the lowest share among the metros Redfin analyzed. It was followed by San Jose, Calif. (21%), Boston (23.1%), Philadelphia (30%) and Austin (33.9%).

Mar 15, 2023
Fannie Mae Transfers Credit Insurance Risk On $31.8B In Loans

CIRT 2023-2 and CIRT 2023-3 transferred a combined $926 million of mortgage credit risk to private insurers and reinsurers. 

Mar 27, 2023
Fed Rate Hike Doesn’t Alter Redfin’s Spring Housing Outlook

Says spring home-sale season starts with steady demand, but lack of listings holds back sales.

Mar 27, 2023
Fannie Mae: Banking System Instability Could Cause Recession

ESR Group says housing activity expected to remain subdued.

Mar 24, 2023
House Flipping Up, Profits Down In 2022: ATTOM

House flips reached their highest level in 17 years, but ROI was lowest since 2008.

Mar 24, 2023
New-Home Sales Rose For 3rd Straight Month

Supply of houses for sale fell for the fourth straight month.

Mar 23, 2023
Feeling Like A 'Crash Test Dummy'

Rate-sensitive housing market buckles up after the Fed tries again to slow the economy.

Mar 23, 2023