In the whole of the United States, particularly in this quarter this year, the number of home sales have reached their best ever values in not just the last few years, but the past few decades as well. Real estate is indeed blooming in different parts of the country like Houston and Dallas. Houses are being sold off rapidly even though the prices have increased. And along with these prices, closing costs are also rising higher.
Throughout the year, there have been periods when mortgage rates were fairly good. But, the industry has compensated the low mortgage rates with the closing costs. Until homebuyers have agreed to pay a good price, no deal usually gets signed off.
In the entire nation, the average closing costs this year have been around $2,400. When compared with the previous year, this is actually a 6% increase. Last year, closings costs averaged around $2,200 and this year, the increase is about $200. These values have been calculated for mortgages that were valued at $200,000 and the down payment was 20% of the home price.
Just like closing costs, the under-writing fees or the origination fees also experienced a rise of 8%, and reached an average of $1,700. The same trend was also observed for third party fees, which is around $700, an increase of 1% from last year’s values. Third-party fees include expenses such as appraisal fees, credit check charges and so on.
For most of this year, mortgage rates have been better than they have been in the last couple of years. Lenders are thoroughly enjoying this period as more and more people sign off contracts with them for new loans or refinanced mortgages.
An experienced mortgage analyst, who works for Bankrate.com, Polyana da Costa, stated that lenders have not had to compete much in the market in recent times. The rates might have been low, but there were no restrictions as such on the closing costs, which have soared throughout this year.
Polyana da Costa also went on to say that in the next couple of months, mortgage rates may increase, which would put homebuyers off. At that time, closing costs will have to be brought down, so that customers keep an interest in the real estate market.
As of now, closing costs are trending towards an increase. They have reached their highest values in Hawaii, averaging at $3,000 whereas the nation’s average is $600 less than this.