Corelogic’s ClosingCorp, provider of residential real estate closing cost data and technology, released its most recent Purchase Mortgage Closing Cost Report, which showed that in 2021, the national average for closing costs for a single-family property were $6,905 including transfer taxes and $3,860 excluding transfer taxes. These figures represent 13.4% and 11.2% annual increase, respectively.
Key findings in the closing report show 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 transfer taxes. Despite the 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 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,” Bob Jennings, an executive at CoreLogic Underwriting Solutions, said. “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.”
States with the highest average closing costs, including transfer taxes, in 2021 were Washington, D.C. ($29,888), Delaware ($17,859), New York ($16,849), Maryland ($14,721) and Washington ($13,927). States with the lowest average closing costs, including transfer taxes, were Missouri ($2,061), Indiana ($2,200), North Dakota ($2,501), Wyoming ($2,589) and Mississippi ($2,756).
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. On May 5, 2022, CoreLogic’s ClosingCorp will be releasing the annual 2021 Refinance Mortgage Closing Cost Report.
