“Property taxes took an unusually high turn upward last year, pushing effective rates up, while huge gaps in average tax bills between different parts of the country remained in place,” ATTOM chief executive Rob Barber said in the report. “The tax increases were likely connected, at least in part, to inflationary pressures on the cost of operating local governments and schools, along with rising public employee wages and other major expenses.”
A key factor to note was the 1.7% nationwide decline in average home values in 2023 as the housing market boom began to cool. This decline, along with rising property taxes, led to a rise in effective tax rates.
Future tax trends will depend on whether recent decreases in mortgage rates and tight inventory spur a market rebound. Renewed growth in home values that outpaces tax increases could potentially lower effective rates.
The Northeast and Midwest dominate the list of states with the highest effective property tax rates:
- Illinois (1.88%)
- New Jersey (1.64%)
- Connecticut (1.54%)
- New York (1.46%)
- Nebraska (1.46%)
Read next: Housing market stays tight as Spring buying season begins
Source: mpamag.com