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Closing costs for new purchase mortgages fell 2.9% year over year nationwide in 2025, largely because falling home prices significantly reduced consumers’ burden of real estate transfer taxes and other fees.
This is clear according to LodeStar Software Solutions, a company that provides data on mortgage closing costs and fees. The findings come from the company’s Year-over-Year Mortgage Closing Costs report, which compares 2024 and 2025 data for all 50 states and the District of Columbia using lender estimates generated by the company’s closing cost calculation platform.
Overall, the average closing costs for new purchase mortgages (which the report includes recording fees and transfer taxes) decreased from $4,661 in 2024 to $4,528 in 2025. This is based on an average sales price of $438,236 in 2024 and $433,632 in 2025.
However, the picture was mixed at the state level, with 27 states and the District of Columbia seeing decreases in closure costs and 23 states seeing increases.
It is important to note that closing costs vary widely from state to state. Each state has its own fee and transfer tax structure. Therefore, even if two states have the same mortgage financing terms, it is almost impossible for the closing costs to be the same.
“The relationship between closing costs and home affordability is often overshadowed by other factors in the equation, such as interest rates and down payments,” said Ron Carvalho, director of data operations at Lodestar. “However, our data shows that state-level decisions about accounting for taxes and documentation fees directly impact a borrower’s overall financial ability to purchase or refinance a home.”
States with the highest closing costs
According to the report, Delaware will be the most expensive state overall in 2025 when looking at closing costs as a percentage of sale price. Homes with an average price of $415,814 had an average closing cost of $12,707 (3.06%).
And the District of Columbia’s 2025 closure costs were the highest in the nation by dollar value. A home with an average price of $616,476 had closing costs of $13,836, or 2.24% of the sales price.
States with lowest closing costs
In 2025, South Dakota had the lowest closing costs, both as a percentage of a home’s sale price and as a dollar amount. The average closing cost was $1,386, or 0.39% of the state’s average sales price of $354,327.
Maddie McGay is a real estate reporter for NorthJersey.com and The Record, covering everything that’s worth celebrating about living in North Jersey. Find her on Instagram @maddiemcgay or X @maddiemcgayy and sign up for the North Jersey Living newsletter. Have a tip, trend, or great home she should know about? Email MMcGay@gannett.com.
