States Where Closing Costs Are Highest, Lowest

November 3, 2023

Working With Buyers, Closing, Marketing, Residential Real Estate

Help your clients plan ahead so they aren’t blindsided by the fees they’ll pay at the closing table.

Home buyers often focus on saving for a down payment, forgetting that they must budget for closing costs, too. And those fees can add up: The average closing costs in the U.S. are $4,243, according to a new study from Assurance IQ, an insurance provider. On average, home buyers nationwide should plan to budget 1.87% of the home’s value. But average closing costs can vary greatly from state to state, varying from 1.2% to 2.47% of a home’s value.

“Buying a home comes with its share of expenses, and closing costs are a significant part of that,” the Assurance IQ study notes. “While some of these costs might be negotiable, being aware of the average closing costs in your state can equip you for what lies ahead.”

Assurance IQ’s study, which broke down average closing costs per state, factored in common expenses like appraisal fees, inspection fees, attorney fees, mortgage taxes, homeowners insurance, property tax and title insurance. The study found that the following areas have the highest average closing costs in the U.S., all over $6,000. Since closing costs tend to be based on a percentage of the home’s value, the areas with higher housing costs tend to register the highest state averages in closing costs.

New York: $8,039

Median home value: $325,000
Closing costs as percentage of home value: 2.47%

California: $8,028

Median home value: $538,500
Closing costs: 1.49%

New Jersey: $7,702

Median home value: $343,500
Closing costs: 2.24%

Washington: $6,966

Median home value: $366,800
Closing costs: 1.9%

Massachusetts: $6,223

Median home value: $398,800
Closing costs:1.56%

On the other hand, lower median home values equate to lower closing costs. Here are the areas with the lowest closing cost averages in the nation, all under $2,700.

West Virginia: $2,124