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Home sellers offered concessions in 44.7% of U.S. sales in August, the highest August share since at least 2020, as a strong buyer's market drives creative incentives.
Home sellers offered concessions in 44.7% of U.S. home sales in August, a 2.1 percentage-point year-over-year increase and the highest August share since at least 2020, according to new data from Redfin. The brokerage and property search platform reported that sellers are providing incentives such as mortgage rate buy-downs, repairs, appliances, and concessions totaling $10,000 to $20,000 to attract buyers in an increasingly favorable market for purchasers.
Some sellers have resorted to unusual perks. In Charlotte, North Carolina, one seller offered an all-expenses-paid cruise as part of a home-buying deal. Another seller also offered a cruise. These creative incentives reflect the strongest buyer's market on record, with sellers outnumbering buyers by 58% in August, Redfin said.
Buyer's Market Drives Seller Concessions
The surge in concessions is tied to a market where buyers are wary of borrowing costs, reducing demand for homes. But those still in the market face less competition and can negotiate better terms, including concessions. According to Redfin, in August, 15.8% of homes nationwide saw both a price drop and a concession, up from 15.6% a year earlier, the highest share since Redfin began tracking the data point.
Redfin Chief Economist Daryl Fairweather said concessions are a unique and often overlooked data point that can provide a more nuanced view of the housing market. For example, the national median home price rose year-over-year as of August, suggesting homes are becoming more expensive despite reduced demand. But with concessions factored in, Fairweather speculated the data would tell a more accurate story.
Fairweather said, paraphrasing, that this is more of a guesstimate, but if all these concessions were quantified, home prices would be seen as down and people would be getting better deals.
Sun Belt Cities See Highest Concession Rates
The cities with the most and least instances of concessions provide further evidence of a buyer's market. The vast majority of places where concessions are most common are in the Sun Belt, a result of a wave of post-pandemic construction to accommodate an influx of remote workers seeking lower mortgage rates. In Atlanta, the city with the highest prevalence of concessions, 72.8% of homebuying deals included this form of incentive. In Charlotte, 67.9% of deals included concessions.
Conversely, the Bay Area and New York saw the lowest share of concessions. New York saw only 5.7% of sales coming with concessions, and San Francisco had 18.6% of sales with concessions. These major metropolitan areas have strong housing markets, with droves of wealthier buyers keeping housing supplies low.
Economic Factors and Future Inventory
Fairweather noted that the market has been rocked by tariffs, the Iran war, and concerns about what some have called a growing AI bubble. The Federal Reserve's recent rate hike and expected hikes for the rest of the year have already been priced into the market, she said, but other macroeconomic events, such as trade policy or an AI bubble burst, could turn the market on its head.
Looking ahead, older generations who will eventually sell their homes could add more inventory. Today, the older generation has a tight grip on real estate, accounting for about 42% of purchases and 52% of sales, according to Realtor.com. While an overall restricted supply of homes has kept many Gen Z and millennial home buyers out of the market, that will eventually have to change.
Fairweather said boomers are a large group of homeowners who will be passing on their homes slowly but surely over the next decade or two, adding more inventory to the market. She said this is definitely not the biggest factor right now, but probably the most persistent factor.
Redfin Home Sellers Buyer's Market August Sales Daryl Fairweather Sun Belt Charlotte
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