With the acceleration in house prices in 2021, closure costs have increased at the same time, but at a slower pace.
According to mortgage data and technology provider ClosingCorp, the average nationwide closing cost to buy a single family home was $ 6,837 including tax and $ 3,836 before tax in the first six months of 2021. The numbers represent increases of 12.3% and 10.5% from the 2020 year-end averages which were $ 6,087 and $ 3,470, respectively.
Although house prices continued to rise at a record pace in the first half of the year, the pace of rising closing costs, measured as a percentage of home purchase value, slowed, according to ClosingCorp CEO Bob Jennings.
“Although the average home price has increased nearly $ 45,000, the cost of closing this property, excluding taxes, only increased by $ 400. In fact, closing costs as a percentage of purchase prices fell from 1.06% of the deal in 2020 to 1.03% that year, ”he said in a press release.
ClosingCorp determined the cost by analyzing 1.9 million single-family purchase transactions made through its platform, taking into account the lender's ownership policy, owner's ownership policy, valuation, settlement, registration fees, land surveying and transfer taxes. It used house price data from CoreLogic to estimate the average cost of closure at the state and local levels.
Refinance completion fees also increased to $ 2,398 [excluding tax], an increase of 4.87% from last year's reported average of $ 2,287.
ClosingCorp's data showed that the highest cost of closure was on the coast. Tax included, home buyers in the District of Columbia paid an average of $ 30,352 in closing costs for a purchase, well ahead of the rest of the nation. Well behind in second place was Delaware, where the fee average was $ 17,831, closely followed by New York with $ 17,852. Washington and Maryland rounded out the top five most expensive jurisdictions with average closing costs of $ 13,909 and $ 12,056, respectively.
The states with the lowest after-tax acquisition costs were Missouri, where buyers paid an average of $ 2,102 for a single family purchase, followed by Indiana at $ 2,193 and North Dakota at $ 2,321. Kentucky residents paid an average of $ 2,355 in closing costs, while Wyoming buyers paid $ 2,509.
As a percentage of total home price, closure costs in the Mid-Atlantic region were well above the rest of the country when taxes were included. Delaware buyers paid an average of 5.68% of their purchase price in closing fees, while Pennsylvania and District of Columbia residents paid 4.12% and 4.03%, respectively. New York State residents paid an average of 3.38%, followed by Maryland at 3.12%.
Mountain home buyers spent the smallest percentage of their purchase price on the deal. New homeowners in Wyoming, Colorado, and Montana paid only 0.74%, 0.75%, and 0.8% of the selling price in fees, on average. It was followed by Missouri and Indiana, where the average closing cost was 0.88% and 0.95% of home costs, respectively.
Without taxes, coastal residents still paid the highest amount of closure fees. The country's capital again led the country, with an average cost of $ 6,523 for single-family home purchases. New York followed at $ 6,300, while three states in the west completed the top 5. Hawaii shutdown costs averaged $ 5,976, California homebuyers paid an average of $ 5,772, and Washington residents owed $ 4,803 for the shutdown.
The five states with the lowest closing costs [excluding taxes] were in the central United States. Arkansas buyers were billed the lowest closing fees in the country, averaging $ 2,071, while in Missouri the cost was $ 2,102. It was followed by Indiana, Nebraska, and Kentucky, where the average for all three states was $ 2,193.