44.4% of Q1 Home Sales Included Seller Concessions

During the first quarter of this year, 44.4% of home sale transactions involved seller concessions to buyers, according to data from Redfin (NASDAQ:RDFN). That’s up from 39.3% in the first quarter of 2024 and shy of the 45.1% record set in the first quarter of 2023.

Redfin defined concessions as money from the sellers that went toward repairs, closing costs and/or mortgage-rate buydowns. It did not include situations in which the seller lowered the list price of their home or lowered the price due to a negotiation with a buyer.

Seattle led the nation in this area, with sellers offering concessions to buyers in 71.3% of home sale transactions during the first quarter – the highest share among the 24 major metropolitan areas Redfin analyzed and nearly double the 36.4% share recorded one year earlier.

“It’s super common to see seller concessions for condos and new-construction townhomes, but less so for single-family homes – unless the single-family home has been sitting on the market for a while,” said Stephanie Kastner, a Redfin Premier real estate agent in Seattle. “Condos have become a tougher sell because of skyrocketing HOA fees and insurance. And builders are offering concessions because it’s in their best interest to keep sale prices high; they’re willing to pay buyers’ closing costs and maybe provide a free washer-dryer if it means they don’t have to drop the listing price.”

On the flip side, New York City saw the biggest drop in concessions. Home sellers there gave concessions to buyers in just 5.5% of home-sale transactions, down 15.7 percentage points from a year earlier and the lowest share among the metros Redfin analyzed.

Redfin also noted that roughly one in five homes (21.5%) sold during the first quarter had a final sale price below the asking price in addition to a concession, up from 18.5% a year earlier. Roughly one in six (16.2%) had a price cut and a concession, up from 13% a year earlier. And about one in 10 (9.9%) had a concession, a price cut and a final sale price below the original list price, up from 8% a year earlier.

But at least those homes sold – roughly 52,000 home purchase agreements were canceled in March, equal to 13.4% of homes that went under contract that month.