The number of home sellers making concessions to buyers has nearly doubled since last year, according to a new Redfin report.
More than two in five home sellers have had to make concessions during the selling process to attract buyers.
In the three months ended April 30, 42.9% of sellers made concessions to buyers, up from 25.5% last year, and just shy of February’s record high of 45.6%, according to the report.
These concessions include money towards everything from repairs to closing costs and mortgage rate buydowns.
The report notes concessions are usually less common in the spring market, as more buyers are looking for a home, but high mortgage rates are making it harder for sellers in the current environment, as many house hunters have put their plans on hold.
Homebuilders are also throwing in freebies, according to the report, as they try to sell off their inventory, offering would-be buyers everything from money toward closing costs to gift cards and even free cars.
But concessions aren’t the case in all markets right now. Some markets have so few homes for sale that there continues to be competition driving up prices, and those involved in bidding wars aren’t seeing concessions from sellers, Redfin says.
Shauna Pendleton, a Redfin agent in Boise, Idaho, says high mortgage rates and low supply have thrown the housing market out of whack, but that each deal is different.
“Some buyers are asking sellers for the sun, the moon and the stars in addition to offering below the asking price, and some are requesting no extras because they’re so motivated to secure one of the few homes on the market,” she said. “The one consistency in the market right now is homebuilders handing out freebies. Most builders are offering concessions equal to about 3% of the sale price, which gets credited to buyers at closing, to offload properties. Buyers are using the extra cash to cover closing costs or buy down their mortgage rate.”
Concessions are up most in towns that saw huge activity during the pandemic, but the increase is being seen in many markets across the country as well.
In the three months ending April 30, just under 16% of sellers in Boston gave concessions to buyers, up from 12% a year earlier.
Concessions aren’t the only way sellers are trying to move their homes; they are also accepting less money.
According to the report, 15.7% of sellers dropped their asking price and provided a concession to a buyer during the three weeks ended April 30 – that’s four times more than the number of sellers who did the same a year ago.