Analyzing the sale data of more than 1.9 million single-family homes in the first half of 2021, ClosingCorp [1] has found that while property values continue to climb, closing costs have not kept up the same pace.
ClosingCorp, a provider of residential real estate closing cost data and technology for the mortgage and real estate services industries, has found that the average closing costs for a single-family home including taxes rose 12.3% to $6,837 year-over-year or a 10.5% increase or $3,836 without taxes.
The District of Columbia was found to have the highest closing costs nationwide—with an average home price of $753,631, closing costs accounted for 4.03% of the purchase price or $30,352 ($6,524 without taxes).
Delaware followed the District of Columbia where the average home price was $313,899 buyers paid closing costs equal to 5.68% (the highest percentage in the nation) of the purchase price of their home. This resulted in costs of $17,831 or $3,848 without taxes.
The two states with the cheapest closing costs were Missouri and Indiana.
The average home in Missouri costs $238,276 and buyers can expect to pay 0.88% of their purchase price on closing, or $2,102. In Indiana the average home costs $229,867 and buyers could expect to pay $2,193 or 0.95% of their purchase price.
“In the first half of 2021, buyers faced significantly higher home prices; in June, for example, the average national price hit a new high of $373,664, and in July leading home price indices registered their highest ever year-over-year gains, said Bob Jennings [2], Chief Executive Officer of ClosingCorp. Although the average home price increased by nearly $45,000, the closing costs, excluding taxes, on that property only increased by $400. In fact, closing costs as a percentage of purchase prices declined this year, going from 1.06% of the transaction in 2020 down to 1.03%. So, in addition to keeping up with high demand, the mortgage industry is doing a good job in holding down the costs it can control.”
ClosingCorp closing calculations include lender’s title policy, owner’s title policy, appraisal, settlement, recording fees, land surveys and transfer tax. The company uses home price data from CoreLogic [3] to estimate closing costs for an average home at the state and county levels. In addition, the company uses ranges, rather than single values, to more accurately capture fees associated with the real transactions.
A full copy of the report [4] can be found at closing.com