Home Sellers Offer More Incentives as Housing Market Shifts
Sellers are increasingly providing concessions like closing cost assistance and rate buydowns, with Atlanta leading the trend.
Home sellers across the United States are offering a growing number of incentives to attract buyers as the housing market increasingly favors house hunters. These concessions can include help with closing costs, repairs, mortgage-rate buydowns, and even the inclusion of appliances.
New data from Redfin indicates that sellers provided concessions to 44.7 percent of U.S. homebuyers in August. This figure is up from 42.6 percent a year prior and represents the highest share for August since at least 2020.
The trend is particularly evident in the Sun Belt region, with eight of the top ten cities offering the most concessions located there. Atlanta leads the nation, where sellers provided incentives in 72.8 percent of home sales in August. Charlotte, North Carolina, followed with concessions in 67.9 percent of sales, and Phoenix, Arizona, was close behind at 67.4 percent.
Other cities with high rates of seller concessions include Las Vegas (66.7 percent), Raleigh, North Carolina (66.3 percent), Nashville, Tennessee (63.1 percent), Houston (58.5 percent), and Denver (58.4 percent). Riverside, California, and Virginia Beach, Virginia, also appeared in the top ten.
These concessions are distinct from price reductions. Real estate agents note that buyers are leveraging the increased number of options available to them. Builders, in particular, are offering significant incentives on new homes to attract buyers, who are becoming more selective.
The surge in concessions in Sun Belt markets is partly attributed to increased construction during the pandemic, when demand for warmer climates and less densely populated areas grew. However, demand has since moderated in many of these areas, leading to greater competition among sellers.
Across the U.S., 15.8 percent of homes sold in August included both a price cut and a seller concession. Furthermore, 59.5 percent of homes sold for less than their original asking price during the same month. Cities like West Palm Beach, Miami, Austin, and San Antonio saw a high percentage of sales below asking price.
In contrast, markets such as San Jose, New York, and San Francisco show fewer seller concessions. San Francisco, for instance, is considered a seller's market, partly driven by demand from the AI industry, leaving buyers with less negotiating power.
For buyers in areas where concessions are common, focusing on negotiating the overall deal, including these extras, can be more beneficial than solely negotiating the sticker price, especially with elevated mortgage rates and high median home prices.