Closing Cost Breakdown by State (2026 Data)

Buyers in Washington, D.C. paid an average of $17,545 in closing costs on a single-family purchase — eleven times what buyers in South Dakota paid for the same transaction type. The gap has almost nothing to do with loan size and almost everything to do with one line item: transfer taxes imposed by state and local governments.

The LodeStar 2026 Purchase Mortgage Closing Cost Data Report — released April 27, 2026, drawing on 620,000+ purchase quotes from transactions closed between January 1 and December 31, 2025 — puts the national average closing cost at $4,528, or 1.04% of the average sales price of $433,632. That’s down fractionally from $4,661 (1.06%) in the prior year’s report. But the national average is close to useless for budgeting. In Delaware, closing costs averaged 3.06% of the sales price. In South Dakota, 0.39%. Same transaction, seven-and-a-half-times difference in fee burden as a percentage of purchase price.

Key Numbers at a Glance

Sources: LodeStar Software Solutions 2026 Purchase Mortgage Closing Cost Data Report (April 2026); LodeStar 2025 Purchase Mortgage Closing Cost Data Report (April 2025); Freddie Mac Primary Mortgage Market Survey (PMMS), May 28, 2026; CFPB Junk Fees Inquiry (May 2024). The LodeStar 2025 report analyzed 450,000 quotes from 2024 transactions; the 2026 report analyzed 620,000+ quotes from 2025 transactions.

What’s Actually Inside “Closing Costs”

The 2–5% rule you’ve probably heard gets repeated because it’s defensible at the national level when prepaids are included. LodeStar’s methodology is tighter: it counts fees, recordation charges, transfer taxes, settlement/escrow fees, and title policies — and comes out to 1.04% on average. Add prepaids (first-year homeowner’s insurance, property tax escrow, prepaid interest at closing), and you’re typically adding another 1–2% of the purchase price, depending on local property tax rates. On a $600,000 home in a high-tax metro, closing day cash often clears $30,000 before a dollar of down payment.

The fee categories break into two buckets: lender-controlled and government-controlled. Lender fees — origination, underwriting, processing — are negotiable and shoppable. The 2026 LodeStar data puts the national median closing cost excluding recording fees and taxes at $2,993, compared to $3,492 including them. That $499 national-median gap between the two figures is the floor for government charges. In high-transfer-tax states, that gap explodes. Delaware’s 4% combined state-local realty transfer tax (split between buyer and seller by convention, but the buyer’s share is contractually negotiable) is the single biggest driver of why Delaware costs 3.06% of the sales price while neighboring Pennsylvania — itself no bargain at 2.36% in 2025 data — looks relatively reasonable by comparison.

For first-time buyers planning their purchase, the practical implication: title insurance and third-party service fees are shoppable under CFPB’s Loan Estimate framework, while transfer taxes and recording fees are fixed by law. Shopping lenders can reduce origination fees, but it cannot touch the tax line.

Closing Costs by State: The Full Ranking

The table below uses LodeStar’s 2025 Purchase Mortgage Closing Cost Data Report — the most complete state-level dollar dataset publicly available, covering 450,000 purchase quotes from 2024 transactions. The 2026 report confirmed the same state ranking order with marginally lower national figures; 2026 state-level dollar figures had not been published in full tabular form as of this article’s publication date. Delaware’s percentage rose from 2.99% (2025 report) to 3.06% (2026 report); the national average fell from 1.06% to 1.04%.

Source: LodeStar Software Solutions, 2025 Purchase Mortgage Closing Cost Data Report (April 2025), analyzing 450,000 purchase quotes, January 1–December 31, 2024. Closing costs include fees, recordation charges, transfer taxes, settlement/escrow fees, and title policies. Excludes prepaids. Partial state listing shown; full 50-state data available at lodestarss.com. The 2026 LodeStar report (April 2026, 620,000+ quotes from 2025 transactions) confirmed Delaware leading at 3.06% and a national average of 1.04% ($4,528).

Transfer Taxes Are the Variable That Actually Matters

Strip out transfer taxes from both the high-cost and low-cost states and the gap between them narrows dramatically. LodeStar’s analysis confirms that in states without transfer taxes — or with minimal ones — closing costs as a percentage of the sales price consistently run near the lower bound of 0.5% to 0.6%. Delaware’s combined state-local realty transfer tax of roughly 4% of the purchase price (buyer and seller each conventionally paying 2%, though contractually negotiable) explains most of why it tops the national ranking at 3.06%.

New York’s mansion tax — a graduated surcharge on purchases above $1 million that reaches 3.9% on deals above $25 million — pushes high-end buyers further past the 2.47% statewide average. On a $1.5 million New York purchase, the closing cost bill including transfer taxes can exceed $50,000 before the first prepaid dollar. Pennsylvania’s realty transfer tax, set at 2% statewide with additional local levies in Philadelphia reaching a combined 4.278%, puts Philadelphia buyers in a category resembling Delaware on a dollar basis. For households comparing markets, this creates a concrete calculation: the Pennsylvania–Texas closing cost differential on a $650,000 home is roughly $10,000 in taxes alone.

Florida’s appearance at sixth-highest nationally surprises many buyers, given its reputation as a low-tax state. The explanation is Florida’s documentary stamp tax of $0.70 per $100 of purchase price on the deed — lower than Delaware or New York, but high enough to drag average closing costs to $8,492 statewide. Florida also imposes a separate intangible tax on the mortgage itself. Households planning a first home in a high-cost city should check which of these state-level charges apply to the specific county — Miami-Dade has additional levies.

What the $150k+ Buyer Actually Pays: Scenario Analysis

The LodeStar averages are calculated against the state’s own average sales price, which creates a distortion when a $150k+ household is buying above the state median. Closing costs are largely flat in dollar terms for a given geographic area — transfer taxes scale with price, but lender fees and title insurance do not scale proportionally. That means the percentage burden falls as the purchase price rises, while the dollar amount climbs.

The scenarios below apply the 2026 Freddie Mac rate of 6.53% (30-year fixed, PMMS as of May 28, 2026) and close-cost rates from LodeStar’s 2025/2026 data to three representative markets. Prepaids are estimated at 1% of purchase price for all scenarios as a conservative floor — actual prepaids depend on local property tax rates and insurance premiums.

Closing cost rates: LodeStar Software Solutions 2025 Purchase Mortgage Closing Cost Data Report (Georgia 1.24% confirmed; Pennsylvania 2.36% confirmed; Texas estimated at 0.80% based on LodeStar 2025 secondary references noting Texas has no transfer taxes). Prepaids estimated at 1.0% of purchase price — a conservative floor. Actual prepaids vary by county property tax rate and insurance market. These are illustrative estimates, not lender quotes.

Finluxy First Home Cash Requirement

The Finluxy First Home Cash Requirement captures total cash needed at closing — down payment plus closing costs plus prepaids plus an inspection and repair reserve — expressed both in dollars and as months of gross household income. It is the number that determines whether a buyer can actually close, not the number their mortgage approval letter implies.

The two scenarios below model a $150k household income with a 10% down payment (the median for first-time buyers per NAR’s 2025 report) buying at $600,000 — one in a moderate-cost market (Georgia) and one in a high-transfer-tax market (Pennsylvania). A $5,000 inspection and repair reserve is included as a minimal buffer; actual reserve needs depend on property age and inspection findings.

Down payment: NAR 2025 Profile of Home Buyers and Sellers (10% median for first-time buyers, highest since 1989). Closing cost rates: LodeStar Software Solutions 2025 Purchase Mortgage Closing Cost Data Report. Prepaids estimated at 1.0% of purchase price. Inspection/repair reserve: $5,000 (Finluxy standard floor). Gross income: $150,000 annual. Monthly gross: $12,500. Cash requirement as months of gross income = total cash ÷ monthly gross income.

Both scenarios land well above the 28–40% of annual income range that characterizes entry-level purchases at lower price points. A $600,000 purchase on $150,000 income requires roughly 6.3–6.8 months of gross income in liquid assets before the mortgage is even approved. This is not a down payment problem — it’s a total liquidity problem. The buyer who has saved $60,000 for a down payment and thinks they’re ready is typically $18,000–$25,000 short of what closing day actually requires.

The Overlooked Variable: Prepaids Scale With Local Property Taxes

Most closing cost coverage focuses on the transfer tax gap between states. What receives far less attention is the prepaid variation that tracks local property tax rates — and that variation compounds the high-cost market penalty significantly.

Lenders typically require two to three months of property taxes in escrow at closing, plus the full first year of homeowner’s insurance paid upfront. On a $600,000 home in a New Jersey county with a 2.5% effective property tax rate, that escrow contribution alone runs $3,750 (two months). In a Texas county at 1.8%, it’s $2,700. In a lower-tax Sun Belt market at 0.9%, $1,350. The closing cost tables from LodeStar explicitly exclude these prepaids — so buyers in New Jersey, Illinois, and Connecticut face a double burden: above-average closing costs and above-average prepaid escrow requirements. Understanding the total cash needed to close on a $600k home requires layering both figures together.

For the $150k+ household weighing markets, this creates a compound analysis: compare the transfer tax environment, the property tax base rate, and only then the purchase price. A $600,000 home in Austin (low transfer taxes, moderate-to-high property taxes) and a $600,000 home in Philadelphia (high transfer taxes, moderate property taxes) may arrive at similar total closing-day cash requirements through entirely different paths. The components, however, have different long-term implications — transfer taxes are a one-time sunk cost, while property taxes are a recurring annual obligation embedded in every PITI payment going forward.

How the 36% Cost Surge (2021–2023) Changed the Calculation

The CFPB’s May 2024 inquiry into mortgage closing costs documented that median total loan costs for home mortgages rose over 36% between 2021 and 2023, reaching approximately $6,000 at the 2022 median. That figure — higher than LodeStar’s 2025 average of $4,661 — reflects the CFPB’s broader definition, which includes lender-charged loan costs that LodeStar excludes from its fee-centered dataset. The two figures measure different things and should not be directly compared, but both confirm the same directional trend: the non-price cost of buying a home has risen substantially faster than general inflation over the past four years.

LodeStar’s 2026 report showing a slight dip from $4,661 to $4,528 nationally is modestly encouraging, but context matters: average sales prices also fell modestly (from $438,236 to $433,632), meaning closing costs as a percentage of price held nearly flat at 1.04% versus 1.06%. The structural composition of costs hasn’t changed. Transfer taxes still dominate in high-cost states, title insurance remains the largest shoppable line item, and FHA loan borrowers carry an additional upfront mortgage insurance premium (MIP) of 1.75% of the base loan amount — a cost that does not appear in LodeStar’s conventional-transaction dataset at all.

First-Time Buyers Are Carrying More Cash Than Ever — and Still Falling Short

NAR’s 2025 Profile of Home Buyers and Sellers (covering transactions from July 2024 through June 2025) shows first-time buyers putting down 10% — the highest median down payment for that cohort since 1989. They’re also at a historic low share of the market: 21% of all buyers, down from a pre-2008 norm of roughly 40%.

That 10% figure, taken in isolation, sounds like buyers are being more conservative. Read against the Finluxy First Home Cash Requirement, it confirms the opposite: buyers are scraping together every available dollar just to clear the down payment minimum, with little left for the closing cost and prepaid stack on top. The median first-time buyer age hit 40 in 2025 — a full decade older than the historical norm — suggesting that households are spending 10+ additional years accumulating the liquidity these transactions now require. Understanding the down payment savings timeline at various income levels shows why: even at $90k–$120k household income, reaching 10% down on a $500k home while maintaining the 6+ months of closing cash takes five to eight years of disciplined saving at high savings rates.

For the $150k+ household with existing savings, the calculus is different. The question isn’t whether to get there — it’s whether deploying that cash at 10% down versus 20% down makes sense at current rates. At 6.53% (Freddie Mac PMMS, May 28, 2026), the break-even between 10% down plus private mortgage insurance (PMI) and 20% down depends heavily on how long the buyer holds the property and what the opportunity cost of the additional down payment capital is. PMI on a $540,000 loan (90% LTV on a $600,000 home) typically runs $2,160–$6,480 annually (0.4%–1.2% of the loan balance), depending on credit score and lender. That annual PMI cost must be weighed against the return available on the $60,000 that would otherwise be deployed as additional down payment.

States Without Transfer Taxes: The Low-Cost Closing Tier

Thirteen states impose no real property transfer tax: Alaska, Idaho, Indiana, Kansas, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon, Texas, and Wyoming. Within this group, closing costs are almost entirely lender fees and title insurance — the shoppable components. LodeStar’s 2026 data shows South Dakota (which has a minimal transfer tax) posting the lowest percentage at 0.39%, with Colorado at 0.50% and Iowa at 0.56% rounding out the bottom three nationally.

Texas merits separate note: despite no transfer tax, LodeStar’s 2025 report placed Texas in the mid-range nationally due to relatively higher title insurance premiums. The Texas Department of Insurance ordered a 10% reduction in title insurance premiums in 2025, which should modestly reduce that burden for 2026 transactions. Oregon similarly has no transfer tax at the state level, though some local governments (Portland, for instance) have imposed their own. Buyers in these markets who also take advantage of first-time buyer assistance programs can in some cases get closing cost credits that offset the remaining lender fee and title component almost entirely.