Closing costs keep pace with rapidly rising home prices
Jennings pointed out that the 13.4% jump in mortgage closing costs corresponds to a 13.2% year-over-year increase in lender origination fees, according to a Mortgage Bankers Association report. .
Additionally, the report showed that closing costs have kept pace with rapidly rising home prices. In 2021, the average U.S. home price increased by more than $50,000, while the average purchase closing cost increased by $818 including tax and $390 excluding tax.
Read more: U.S. home prices post another double-digit rise
Despite the increase in the absolute dollar amount of closing costs, closing costs as a percentage of home sales decreased slightly compared to 2020. The average purchase costs as a percentage of the average sale price in 2021 was 1 .81%, compared to 1.85% in 2020. When taxes excluded, the purchase fee as a percentage of the selling price was 1.01% last year compared to 1.06% the previous year.
The report included the lender’s title policy, owner’s title policy, appraisal, settlement, registration fees, surveys and transfer taxes as part of the total closing costs. The calculations use home price data from CoreLogic to estimate closing costs for an average home at the state, Central Statistical Area (CBSA), and county levels.