- More sellers resorted to doling out more freebies as the US housing market stalled.
- Sellers that gave concessions accounted for 35% of sales in the three months ending in October, per Redfin data.
More freebies are being handed out to home buyers, thanks to stalling sales and high mortgage rates freezing the housing market.
That's because more sellers have resorted to offering buyers concessions – free offerings intended to make a sale more affordable for buyers – in order to close deals. Sellers that gave concessions accounted for 35% of home sales in the three months ending in October, according to Redfin data, surging from 27.6% of sales in October 2021.
"Sellers have become more open to the idea of giving out concessions like cash for repairs and mortgage-rate buydowns, in part because many of them want to get their homes sold quickly due to major life events like divorces and new jobs," Redfin Premier agent David Palmer said in a statement on Tuesday.
When mortgage rates hit 23-year highs in October, that sidelined prospective home buyers, who also backed out of more sales earlier this year.
According to Redfin, 16.3% of home sale agreements were canceled in September, the highest rate of cancellations since October of last year.
"House hunters are pickier than ever before. It's really expensive to buy a home today, so they want to make sure they find the right one. Buyers have become increasingly likely to terminate a deal if they don't get the concessions they want," Palmer added.
Meanwhile, property listings spent a median 50 days on the market in October, according to Realtor.com, the longest homes have been on the market in about seven months.
But since October, bond yields have plunged, sending mortgages rates tumbling too. That has helped thaw the housing market. On Wednesday, data from the Mortgage Bankers Association showed purchase activity and refinancing have increased.