LodeStar Report Shows Nominal Year-Over-Year Decline In National Average Closing Costs
LodeStar has released its Year-Over-Year Mortgage Closing Cost Report covering 2024 versus 2025. The report analyzes distinct mortgage quotes across all 50 states and the District of Columbia (D.C.), drawn from the company’s closing cost calculator platform. Nationally, purchase loan closing costs declined by 2.9%, driven largely by falling home prices, which reduced transfer tax burdens across many markets. In total, 28 states saw closing costs decrease, while 23 states experienced increases.
The most dramatic single-market shift occurred in D.C., where closing costs dropped 21.1%. Because D.C. has one of the highest transfer tax rates in the country, the significant decrease in the average purchase price here had a compounding effect on closing costs, though the area still has the highest dollar-value closing costs nationally. Conversely, home prices in Delaware rose modestly, pushing closing costs up by 4.5%, keeping it the most expensive state as a percentage of sale price at 3.06%.
Other key findings from LodeStar’s 2024 v. 2025: Year-Over-Year Mortgage Closing Cost Report include:
- An 7.8% surge in refinance volume, with refi closing costs averaging less than half of purchase closing costs;
- Higher-than-average refinance closing costs for New York and Florida borrowers, driven by taxes structured around the loan or note amount, rather than a property transfer, which then applies to both purchase and refinance transactions; and
- A growing trend of recording fees being redirected to fund non-real-estate programs, such as affordable housing and homelessness services, with little to no borrower visibility.
“The connection between closing costs and housing affordability is often overshadowed by other components to the equation, like interest rates and down payments,” said Ron Carvalho, director of data operations at LodeStar. “However, our data shows that decisions made at the state level on recording taxes and document fees have a direct impact on borrowers’ total financial ability to purchase or refinance their home. Knowing what’s happening with these costs helps lenders provide accurate guidance to their borrowers in their homeownership journey.”
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