Purchase loan closing costs declined nationwide by an average of 2.9% from 2024 to 2025, according to a new data report released by LodeStar Software Solutions.
The decline was attributed to a drop in home prices, which reduced transfer tax burdens across many markets. In total, 27 states and the District of Columbia saw closing costs decrease, while 23 states experienced increases.
The greatest single-market shift during this period occurred in the District of Columbia, where closing costs dropped 21.1%. On the flip side, an uptick in Delaware’s home prices pushed closing costs up by 4.5%, making it the most expensive state as a percentage of sale price at 3.06%.
The LodeStar report also found a 7.8% surge in refinance volumed during this period, with refinancing closing costs averaging less than half of purchase closing costs. There were higher-than-average refinance closing costs for New York and Florida borrowers, driven by taxes structured around the loan or note amount rather than a property transfer.
“The connection between closing costs and housing affordability is often overshadowed by other components to the equation, like interest rates and down payments,” said Ron Carvalho, director of data operations at LodeStar. “However, our data shows that decisions made at the state level on recording taxes and document fees have a direct impact on borrowers’ total financial ability to purchase or refinance their home. Knowing what’s happening with these costs helps lenders provide accurate guidance to their borrowers in their homeownership journey.”
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