Seller Concessions Hit 5-Year High as Sunbelt Markets Rebalance

Seller concessions — cash credits, closing cost assistance, and mortgage rate buydowns offered by sellers to close deals — have reached their highest levels since early 2021 in several major Sunbelt markets, according to data released this week by Redfin. In Phoenix, 54% of closed transactions in February included some form of seller concession, up from 38% a year ago. Dallas and Jacksonville posted similarly elevated figures at 49% and 52%, respectively.

The shift reflects a broader rebalancing underway in markets that boomed dramatically during the pandemic years. Phoenix saw home prices surge more than 70% between 2020 and 2023, fueled by an influx of remote workers from California and the Pacific Northwest. As those migration tailwinds have faded and new construction has added supply, the leverage has swung back toward buyers.

The most common concession is the mortgage rate buydown, in which sellers pay points upfront to reduce the buyer's interest rate for the first one to three years of the loan. A 2-1 buydown on a $450,000 purchase — reducing the rate by 2 points in year one and 1 point in year two — can save a buyer several hundred dollars per month during the adjustment period, making the deal meaningfully more affordable without requiring a formal price reduction.

Builders have also entered the concession game aggressively. D.R. Horton, the nation's largest homebuilder, disclosed in its most recent earnings call that incentive spending per home sold averaged $22,400 in markets with elevated new supply, with rate buydowns accounting for the largest share. The company said it expected incentive levels to remain elevated through at least mid-2026 as it works through standing inventory.

Real estate economists note that concessions are a healthier market signal than outright price cuts. They allow buyers and sellers to bridge valuation gaps without triggering the psychological resistance that comes with a formally reduced list price. But for buyers, extracting concessions now requires skilled negotiation and a willingness to push — attributes that agents serving buyers in these markets are increasingly being asked to demonstrate.

The national median concession value in February stood at $9,800, according to Redfin, compared to $6,200 a year earlier. If Sunbelt rebalancing continues on its current trajectory, analysts expect that figure to climb further before the market finds equilibrium later this year.