Despite Jump In Volume, Average Closing Costs, Excluding Taxes, Up Only $5 Year-Over-Year
ClosingCorp, a provider of residential real estate closing cost data and technology for the mortgage and real estate services industries, released its most recent closing cost data, which showed that in 2019 national average closing costs for a single-family property were $5,749 including taxes, and $3,339 excluding taxes.
ClosingCorp cost calculations include lender’s title, owner’s title, appraisals, settlement fees, recording fees, land surveys and transfer tax. ClosingCorp uses home price data from CoreLogic to estimate closing costs for an average home at the state, core-based statistical area (CBSA) and county levels. ClosingCorp uses ranges, rather than single values, because it allows them to more accurately capture fees associated with the real transactions.
Dori Daganhardt, chief data officer of ClosingCorp, said: “To get a better overall picture of what is actually going on in a market, we analyzed data on more than 1.6 million single family purchase transactions—roughly 33% of all 2019 single family existing home purchases nationwide—that ran through our Fees platform last year. We are reporting ‘market-specific’ rates and fees not just network averages charged by the most active settlement services providers in each geographic area.
Commenting on what this means to consumers, Bob Jennings, chief executive officer of ClosingCorp, said: “In 2019, the U.S. mortgage industry originated more than $2.3 trillion in purchase and refinance loans– a significant year-over-year increase in volume. Unlike the cost of many products that spike when demand goes up, the costs associated with mortgage closings remained flat in 2019. This was good news for homebuyers. In fact, the difference in the average closing cost between 2018 and 2019 was only $30, including taxes, and $5, excluding taxes.”
Jennings attributed much of the cost control to the increased use of technology by both lenders and settlement services providers which enabled the industry to scale up capacity while holding the line on closing costs. “It will be interesting to see if this trend continues in 2020, as record low interest rates were accelerating refinances just before the industry began to face the national COVID-19 emergency,” he noted.
The 2019 report shows the states with the highest average closing costs, including taxes, were: District of Columbia ($25,800), Delaware ($13,273), New York ($12,847), Washington ($12,406) and Maryland ($11,876). The states with the lowest closing costs, including taxes, were: Indiana ($1,909), Missouri ($2,063), South Dakota ($2,159) and Iowa ($2,194). The states with the highest average closing costs, excluding taxes, were: District of Columbia ($5,723), New York ($5,612), Hawaii ($5,388), California ($5,064) and Washington ($4,538). The states with the lowest closing costs, excluding taxes, were: Indiana ($1,909), Nebraska ($1,952), Iowa ($1,954) and South Dakota ($2,002).
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