Understanding Closing Costs

Closing costs can significantly impact the overall expense of buying a home, and they vary widely across different states. Recent data highlights that these costs can range from as low as 0.46% of the sale price in South Dakota to as high as 2.99% in Delaware, where transfer taxes are particularly influential.

Key Findings from Recent Research

Ron Carvalho, the director of data operations at LodeStar, pointed out that there is surprising consistency between the median and average closing costs relative to home sale prices. He noted, “There’s not much skewing of the average for high or low transaction prices. Our data seems to suggest that there’s a fairly tight price range in a given market, maybe a narrower price range than one might expect.”

State Variations in Closing Costs

States that do not impose transfer taxes or have minimal fees generally report lower closing costs. Notable examples include:

• South Dakota: 0.46%
• Alaska: 0.54%
• North Carolina: 0.56%

Conversely, states with high percentages of closing costs typically have significant transfer taxes. Alongside Delaware, New York, Vermont, Pennsylvania, and Washington, D.C. rank among the highest in this regard.

Current Trends in Home Sale Prices

As of 2024, national averages indicate that the price of homes is positioned at $438,236 while the median sale price stands at $409,839. When accounting for recording fees and taxes, the respective average and median closing costs amount to $4,661 and $3,513. However, excluding taxes and fees reveals reduced figures, with averages at $3,042 and medians at $2,958.

Future Reports

LodeStar is expected to release a comprehensive report on refinance mortgage closing costs on May 5. To access the full report on purchase closing costs, click here.