The $526K Reality Check: What’s Really Driving the Total Cost of Homeownership?

Highlights:

• Total homeownership costs have increased by over $526,000 since 2020, primarily driven by rising lender-related/third-party closing costs (up nearly 25%) and recurring monthly expenses ($1,464+ increase), not credit report fees.

• Downgrading from a comprehensive tri-merge credit report to a one or two-bureau report to save approximately $40 is a disproportionate risk that reduces borrower risk visibility, potentially increasing buyback exposure and inaccurately denying creditworthy borrowers.

Amid rising homeownership costs, mortgage industry leaders are seeking meaningful ways to reduce expenses, and some have identified credit report fees—specifically tri-merge credit reports—as a target. Yet, how significant is this cost within the bigger picture?

To answer this question, we examined the true cost of buying a home and found that the price of the credit report, specifically credit data, is one of the smallest components of the total spend while being the most critical part of the credit risk analysis

Closing Costs and Recurring Expenses Are Up, But Credit Costs Remain Low

Prices for nearly everything are up these days, and homeownership is no exception. A recent Equifax analysis confirms this, showing an estimated $2,000 increase in total closing costs in recent years.

From 2020 through 2025, lender-related closing costs rose by $1,059—nearly 25%—for things like origination/processing, underwriting, application, and credit report fees. Also up by nearly 25% are third-party related closing costs, which increased by $985 for title, legal, document, escrow, and recording fees.

Recurring expenses including property taxes, principal and interest, and insurance have also risen significantly over the past five years, increasing by more than $1,464 per month and by more than $17,556 per year. Taken together, the total cost of homeownership has soared by more than $526,000 since 2020.

What about the price of a tri-merge credit report?

It only increased by approximately $39, representing just 1.5% of total closing costs and less than 0.005% of total homeownership costs. It remains a small, yet essential cost that provides the transparency needed to unlock the dream of homeownership.

The Value of Three—and the Risk of Less

Tri-merge mortgage credit reports have long been the gold standard in mortgage lending because they provide the most comprehensive views of borrowers' credit, compiled from the three Nationwide Consumer Reporting Agencies (NCRAs).

Yet, in a rush to address rising costs, some industry leaders suggest that pulling a less comprehensive (and less expensive) one or two-bureau credit report could be an alternative to the standard tri-merge reports. The thinking is that it might help reduce credit costs, particularly those related to loan fallout, when applicants drop out of the lending process before loan closing.

Here’s the risk. Not all creditors report to all three nationwide credit bureaus—some report to two, one, or none—so the reports are not interchangeable: they’re all different. Pulling only one or two reports can easily miss a key tradeline reported to the third credit bureau.

Missing just one tradeline can shift credit score bands, causing lenders to deny potentially creditworthy borrowers, while increasing their buyback exposure due to increased DTI ratios, fraud risk, and eroding investor and partner confidence. Considering the tri-merge report represents less than 1.5% of total closing costs, risking a buyback or a missed liability to save roughly $40 is a disproportionate risk.

A recent release from the Consumer Data Industry Association sums it up best: “Incomplete data leads to two bad outcomes: it either locks out creditworthy borrowers, including first-time buyers and those with thin credit files, or it hides elevated default risk and creates instability. We shouldn’t put taxpayers at risk just to save mortgage companies a few dollars on their bottom line.”

A Better Path Forward for Borrowers and Lenders

Given today’s economic uncertainty, the last thing the industry needs is reduced visibility into borrower risk, which is what happens when you downgrade from a tri-merge credit report to a one or two-bureau report. Instead, lenders need more of the right data, delivered at the right moments.

Rising homeownership costs are real, but the data is clear: tri-merge credit reports are not the reason. They represent a small fraction of total closing costs and an almost negligible share of total homeownership expenses. Meanwhile, they deliver comprehensive risk visibility and coverage that better protects lenders, investors, borrowers, and taxpayers alike.

The smarter solution isn’t less credit data; it’s better timing and use of it. By combining early soft pulls, ongoing credit monitoring, and enriched tri-merge reports at strategic decision points, lenders can better control costs and promote a more inclusive home-buying process.

See the full visual breakdown of True Cost of Homeownership costs.