A new study released by Bankrate, Inc. shows that the cost of getting a mortgage continues to rise despite a soft housing market.

The 2007 average closing cost of $2,736 has gone up to an average of $3,118 in 2008, a 14% increase. In the study's geographical breakdown, New York City leads the nation at an average fee of $4,016, with Texas, Buffalo, Miami and Oklahoma rounding out the top five. North Carolina is the least expensive area with an average fee of $2650, replacing Indiana (now #45 with an average fee of $2878) at the bottom of the list.

"Often times, consumers forget about the added fees involved in buying a home," said Holden Lewis, senior reporter with Bankrate.com. "Closing costs can be extremely expensive if not researched thoroughly. Keeping closing costs at a minimum can make a big difference to homebuyers during difficult economic times."

Bankrate's Closing Cost study was conducted in June and July of 2008 by obtaining four to nine good faith estimates from the Web sites of online lenders. Researchers picked a ZIP code in some of the largest cities in each state and requested information on the closing costs for at $200,000 loan. They requested fees on a 30-year, fixed-rate mortgage for a borrower with a 20 percent down payment and good credit to buy a single-family house. Bankrate's survey includes lenders' origination fees and title and settlement fees, and not taxes or prepaid items.

2008 closing costs averages

2008  2007                   closing   2008  2007                 closing
    rank  rank        State       costs    rank  rank    State         costs

    1      1    New York - NYC    $4,016    30    14  Mississippi     $3,059
    2      2    Texas             $3,975    31    28  Arkansas        $3,048
    3     NA    New York -                  32    13  Louisiana       $3,042
                 Buffalo          $3,845    33    48  Nevada          $3,039
    4      3    Florida - Miami   $3,683    34    38  Washington      $3,028
    5      8    Oklahoma          $3,558    35    20  Virginia        $3,007
    6      9    New Mexico        $3,465    36    34  Montana         $2,970
    7      7    New Jersey        $3,432    37    44  Wisconsin       $2,940
    8      4    Pennsylvania      $3,411    38    18  Rhode Island    $2,932
    9     16    Alaska            $3,409    39    26  Minnesota       $2,929
    10    24    Colorado          $3,358    40*   21  New Hampshire   $2,922
    11    NA    California                  40*   23  North Dakota    $2,922
                 - San Francisco  $3,321    42    31  Georgia         $2,900
    12     5    Ohio              $3,317    43    43  Nebraska        $2,891
    13    17    California - LA   $3,250    44    32  Utah            $2,883
    14    35    Kentucky          $3,213    45    51  Indiana         $2,878
    15    27    West Virginia     $3,201    46    30  Vermont         $2,872
    16    11    Connecticut       $3,200    47    49  Illinois -
                                                       Chicago        $2,869
    17    25    Michigan          $3,191    48    NA  Illinois -
    18    NA    California                             Springfield    $2,826
                 - Sacramento     $3,179    49*   50  Wyoming         $2,804
    19    41    Oregon            $3,161    49*   36  Iowa            $2,804
    20     6    Hawaii            $3,134    51    40  South Dakota    $2,797
    21*   39    Alabama           $3,130    52    29  Maine           $2,792
    21*   12    Massachusetts     $3,130    53    45  Missouri        $2,757
    23    19    Maryland          $3,118    54    42  Kansas          $2,668
    24    15    Tennessee         $3,117    55    47  North Carolina  $2,650
    25    37    South Carolina    $3,103
    26    10    Delaware          $3,098              2008 average    $3,118
    27    46    Arizona           $3,096              2008 median     $3,086
    28    22    District of                           2007 average    $2,736
                 Columbia         $3,086              2007 median     $2,692
    29    33    Idaho             $3,064