A new report has found that the number of sellers offering incentives to potential home buyers jumped in the last months of 2022.
Key Details
- In the years following the pandemic, the housing market has largely been a seller’s market, but new reports show that it may be shifting.
- During the final three months of 2022, real estate company Redfin found that many sellers were offering incentives to their buyers to close a deal.
- Nearly 42% of homes sold at the end of 2022 included buyer incentives such as price reductions, covering closing costs, and warranties on appliances.
- That marks an increase from 30% in the third quarter of 2022.
- For homebuyers looking to offset the increased mortgage rate costs, these incentives were motivators to buy.
- Experts expect that this trend of incentives will continue into 2023.
- Sellers of both existing and new build homes offered incentives to buyers.
Why it’s news
Rising mortgage rates have forced buyers to look for lower-priced options or pushed them out of the buying market altogether. However, as housing sales have slowed, buyers who remained in the market are enjoying increased negotiating power.
Redfin reported that 22% of the homes sold by its agents in the last three months of 2022 included a lowered listing price and some other seller concession. Nearly 19% offered concessions and lower prices while the home was still listed.
“Buyers are asking sellers for things that were unheard of during the past few years. They’re feeling empowered, partly because their offer is often the only one, and partly because they know sellers build up so much equity during the pandemic that they can afford to dole out sizable concessions,” Redfin real estate agent Van Welborn says.
The National Association of Home Builders similarly found that 62% of builders offered concessions such as price reductions to motivate buyers.