Property Taxes in America Hit Historic Milestone

By Suzanne Blake

Reporter, Consumer & Social Trends

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Property taxes in America have reached a historic milestone, but it’s bad news for homeowners across the country.

In 2024, no state had an average residential property tax bill under $1,000, according to NAHB Economics team analysis of the 2024 American Community Survey. The fact that Alabama was still below that threshold in 2023 is an indication that prices have surged nationwide since then.

Why It Matters

Property taxes routinely keep many Americans from becoming homeowners, as the extra costs can add to a mortgage and price out many completely.

The median home price for single-family homes was $462,206 in American in May 2025, according to Redfin data. But the thousands of dollars plus in property taxes on those mortgages mean many Americans would rather rent than buy a home at all.

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What To Know

No state had an average residential property tax bill under $1,000 for the first time in 2024.

In 2023, Alabama’s average was $978, but now homeowners across America are more largely forking out thousands of dollars every month.

Across the country, the average annual residential property tax bill was $4,271 in 2024, up about 4 percent from 2023, according to NAHB Economics team analysis.

Homeowners in New Jersey had the highest real estate taxes, paying an average of $9,767 per home, $2,194 more than the next closest state, New York, at $7,573. Meanwhile, West Virginia homeowners paid the lowest average total real estate taxes at $1,044.

Property taxes rise with assessed values, and those assessments jumped 27 percent nationally between 2019 and 2024, fueling the spike, according to Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com.

Local governments also learned to work around levy caps through debt service exemptions and voter referendums, he added.

Higher property taxes actually lower home purchase prices through capitalization. A doubling of tax rates associates with a 20 percent drop in home prices," Ryan told Newsweek. "Sounds great until you realize this hammers existing homeowners while young buyers still face the same total lifetime cost, just reshuffled. It's trading today's lockout for tomorrow's burden."

Generally, states in the Northeast and California had the highest taxes, as these also tended to be the areas with the highest home values.

Other states like Texas see a large share of property taxes going toward education. Texans recently voted on Prop 13 which increased the homestead exemption from $100,000 to $140,000. That’s the portion of a home’s value shielded from school taxes.

"Texas faces a double-edged sword: migration and job growth have fueled demand, driving property values higher," Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. "Without policy intervention, this trend threatens long-term affordability. When most of a homeowner’s payment is tied up in escrow and interest, owning a home becomes an increasingly difficult proposition."

What People Are Saying

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "To link the jump in property taxes to the higher values of the properties themselves doesn't really tell the full story. While certainly we've seen an increase in property taxes to correspond to higher property values, some of the stark tax jumps have more to do with the effective property tax rate in some states being higher."

Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "Property taxes have surged for two main reasons: supply shortages and institutional buying. We’re not building enough single-family homes, and large investors have scooped up much of the existing supply. This imbalance has driven prices higher, pushing many individual buyers out of the market that it was originally meant to serve."

Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: "Older homeowners in low-tax environments won't budge, creating housing inventory constipation. Meanwhile, states considering property tax cuts need to answer: what gets slashed? Local governments have already pledged future tax revenues to pay billions in municipal bonds. Cut the revenue, and you either gut services or tank local credit ratings. Neither option is pretty."

What Happens Next

The impact of property taxes is significantly linked to the price of homes more generally, Beene said.

"When property values are lower, this higher rate doesn't have as much of an impact, but as values surge higher, it can equal up to hundreds or even thousands of additional tax dollars every year," Beene said. "This should trigger further concerns over housing affordability, as taxes will in most states eat up a larger portion of monthly property payments."

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