Nearly Half of Homebuyers Get Concessions From Sellers as Most Markets Tip in Buyers' Favor

Home sellers gave concessions to buyers in 44.7% of U.S. home sales in August, up from 42.6% a year earlier and the highest share for that month since at least 2020. That's according to a new report from Redfin, the real estate brokerage powered by Rocket. The rise in concessions reflects today's buyer-friendly housing market: August was the strongest buyer's market in records dating back to 2013. With more homes for sale and fewer buyers competing for them, sellers are increasingly willing to cover closing costs, pay for repairs or offer other incentives to get deals across the finish line.

Buyers know they can be picky. They're asking for every concession under the sun. That's especially true for newly built homes. Builders are offering $10,000 or $20,000 in concessions, buying down mortgage rates and throwing in appliances. I had clients walk away from a home they loved because the pantry was too small and they didn't like the laundry room—even after the sellers offered to alter the floor plan. There are so many homes for sale that buyers are holding out for one that checks every box.

Eight of the 10 places where concessions are most common are in the Sun Belt. Atlanta is number one, with home sellers giving concessions to buyers in nearly three-quarters (72.8%) of homebuying deals in August. It's followed by Charlotte, NC, where 67.9% of sellers provided concessions to buyers, Phoenix (67.4%), Las Vegas (66.7%) and Raleigh, NC (66.3%). Nashville, TN, Houston, Denver, Riverside, CA and Virginia Beach, VA, all places where roughly three in five sellers gave concessions, round out the top 10. Phoenix, Charlotte and Riverside are also the places where concessions increased most from a year ago.

Concessions are most prevalent in those metros largely because they're big-time buyer's markets. Nashville, Houston and Las Vegas are among the five strongest buyer's markets in the nation, with more than twice as many sellers as buyers. That means buyers have a lot of options, and sellers are competing for offers—making it more likely that they'll provide concessions to close the deal. Many of those places were hot homebuying spots during the pandemic boom, when low mortgage rates and remote work were motivating people to move. Much of the Sun Belt built homes at a rapid rate to meet demand; Texas, North Carolina, Arizona and Tennessee had some of the most active building pipelines in the county. But since then, their housing markets have done a 180, leaving diminished demand and a big pile of listings.

Concessions were least prevalent in San Jose, CA, where just 4.2% of home sellers gave concessions to buyers in August. Next comes New York (5.7%), followed by another Bay Area metro area, San Francisco (18.6%). Chicago (21.9%) and Philadelphia (25.5%) round out the five places where concessions were least common. Fewer sellers are giving concessions to buyers in those places because their housing markets are relatively strong. San Francisco is one of just five seller's markets in the U.S.—meaning there are more buyers than sellers—largely because the city's AI boom has created a swarm of affluent buyers. San Jose, New York and Chicago are all balanced markets, meaning they have roughly the same number of home sellers and buyers. In places like that, house hunters don't have much leverage to get concessions.

The concession rate decli...