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Hawaii 3rd Highest Closing Costs in USA
By News Release @ 12:00 PM :: 1225 Views :: Cost of Living

Average Closing Costs for Purchase Mortgages Increased 13.4% in 2021, CoreLogic’s ClosingCorp Reports

Closing costs kept pace with rapidly increasing home prices and purchase volumes

The Eastern region of the U.S. had the highest average closing costs in 2021, with Washington, D.C. topping the list at $29,888

News Release from Core Logic

Irvine, Calif., April 21, 2022 – CoreLogic’s ClosingCorp, a leading provider of residential real estate closing cost data and technology for the mortgage and real estate services industries, today released its most recent Purchase Mortgage Closing Cost Report which showed that in 2021, the national average for mortgage closing costs for a single-family property were $6,905 including transfer taxes and $3,860 excluding transfer taxes. These amounts represent a 13.4% and 11.2% year-over-year increase, respectively.

Key Takeaways:

The average U.S. home price increased by more than $50,000 last year, while the average purchase closing costs increased by $818 including taxes and $390 excluding taxes. 

Despite an increase in the absolute dollar amounts of closing fees, closing costs as a percentage of home sales prices were down slightly from 2020.

Average purchase fees as a percentage of the average sales price in 2021 were 1.81% compared to 1.85% in 2020 and when taxes are excluded, were 1.01%, down from 1.06% in 2020.

“As the mortgage industry comes off two years of record-low interest rates and red-hot consumer demand, lenders are now pivoting to address increasing headwinds from higher loan origination costs and lower origination volumes,” said Bob Jennings, executive, CoreLogic Underwriting Solutions. “The Mortgage Bankers Association recently reported lender origination costs show a 13.2% year-over-year increase, which corresponds closely to the 13.4% increase we are seeing on purchase mortgage closing costs. As the market tightens in 2022, it will be interesting to see how lenders and borrowers respond and how these key metrics move.”

State and Metro Takeaways:

The 2021 report shows the states with the highest average closing costs, including transfer taxes, were Washington, D.C. ($29,888), Delaware ($17,859), New York ($16,849), Maryland ($14,721) and Washington ($13,927). The states with the lowest closing costs, including taxes, were Missouri ($2,061), Indiana ($2,200), North Dakota ($2,501), Wyoming ($2,589) and Mississippi ($2,756). The most significant drivers to differences in closing costs were the types and percentages of imposed specialty and transfer taxes.

The states with the highest average closing costs, excluding taxes, were Washington, D.C. ($6,502), New York ($6,168), Hawaii ($5,879), California ($5,665) and Massachusetts ($4,904). The states with the lowest closing costs, excluding taxes, were Missouri ($2,061), Indiana ($2,200), Nebraska ($2,210), Arkansas ($2,281) and West Virginia ($2,465). 

At the metro level, those with the highest average fees with taxes were primarily in the Eastern region of the United States including Vineyard Haven, Massachusetts ($28,724); Bremerton-Silverdale-Port Orchard, Washington ($16,003) and Salisbury, Maryland ($15,723). Comparatively, metros with highest average fees without taxes were in Santa Maria-Santa Barbara, California ($7,063); Kahului-Wailuku-Lahaina, Hawaii ($7,016) and San Jose-Sunnyvale-Santa Clara, California ($6,412).  

Cost calculations include the lender’s title policy, owner’s title policy, appraisal, settlement, recording fees, land surveys and transfer tax. The calculations use home price data from CoreLogic to estimate closing costs for an average home at the state, core-based statistical area (CBSA) and county levels. Ranges, rather than single values, are used to more accurately capture fees associated with the real transactions. 

On May 5, 2022, CoreLogic’s ClosingCorp will be releasing the annual 2021 Refinance Mortgage Closing Cost Report. 

WaPo: D.C home buyers pay highest average closing costs, report finds

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