Property taxes are becoming a larger part of the housing affordability problem in 2026.
Homeowners often focus on the mortgage rate and home price, but the full cost of owning a home also includes property taxes, homeowners insurance, HOA dues, maintenance and utilities. When property tax bills rise, homeowners can feel the increase even if they have a fixed-rate mortgage.
ATTOM’s 2025 property tax analysis found that $396.8 billion in property taxes were levied on more than 89.6 million single-family homes, up 3.7% from 2024. The average single-family home generated a $4,427 property tax bill, a 3% increase from the prior year.
Key takeaways
- ATTOM reported that the average single-family home property tax bill rose 3% in 2025.
- The national effective property tax rate was 0.9%, up from 0.86% in 2024.
- Property tax burdens were highest in parts of the Northeast and Midwest.
- New Jersey, Connecticut, New Hampshire, Massachusetts and New York had some of the highest average bills.
- Property taxes can raise monthly mortgage payments when homeowners pay through escrow.
- Buyers should estimate future property taxes, not just the seller’s current bill.
Why property taxes are rising
Property taxes are usually set by local governments and are tied to assessed value, tax rates, exemptions and local budget needs. They help fund services such as schools, public safety, roads, libraries and local government operations.
The important point for homeowners is that tax bills can rise even when home values are not surging. ATTOM said the national average estimated single-family home value fell 1.7% year over year in 2025, while property tax bills still increased. That helped push the effective tax rate higher.
That is why property taxes should be treated as a separate affordability issue, not just a byproduct of home prices.
Where the tax squeeze is most visible
ATTOM reported that the highest effective tax rates in 2025 were concentrated in the Northeast and Midwest. Illinois had the highest effective rate at 1.84%, followed by New Jersey, Vermont, Connecticut and Ohio.
Average tax bills were highest in states where higher property values and higher tax rates overlap. ATTOM said New Jersey had the highest average single-family property tax bill at $10,499, followed by Connecticut, New Hampshire, Massachusetts and New York. At the county level, Westchester County, New York, had the highest average bill in ATTOM’s analysis at $18,386.
The lowest average property tax bills were in West Virginia, Alabama, Arkansas, Mississippi and Louisiana.
Why buyers should not rely on the seller’s current bill
A seller’s current property tax bill can be misleading.
In some markets, the buyer’s assessed value may reset after purchase. In others, exemptions, caps or senior-owner protections may have reduced the seller’s bill but may not apply to the buyer. A buyer purchasing a home from a longtime owner could face a different tax bill after the sale.
Before making an offer, buyers should ask:
- What is the current annual property tax bill?
- Is the home currently receiving exemptions?
- Could the assessed value reset after purchase?
- When is the next reassessment?
- What local tax rates apply?
- Are school, municipal or special district taxes included?
- Could new construction or improvements affect taxes?
- Are any tax appeals pending?
The goal is to estimate the buyer’s likely tax cost, not simply copy the seller’s current number.
How property taxes affect monthly mortgage payments
For many homeowners with escrow accounts, property taxes are collected as part of the monthly mortgage payment and paid by the mortgage servicer when due. The CFPB says property taxes and insurance premiums can change from year to year, and when they do, the escrow payment and total monthly mortgage payment can change accordingly.
That means a homeowner with a fixed-rate mortgage can still see the monthly payment rise if property taxes or homeowners insurance increase.
What this means
For buyers, property taxes should be part of the affordability calculation from the beginning. A lower purchase price does not always mean a lower monthly cost if property taxes are high.
For homeowners, a higher tax bill may be worth reviewing carefully. Owners should check assessment notices, exemption eligibility and appeal deadlines. Local rules vary, but missing an appeal window can mean waiting until the next assessment cycle.
For sellers, property taxes can affect buyer demand. A home with a high tax burden may face more payment-sensitive buyers, especially when insurance and mortgage costs are also elevated.
FAQ
Are property taxes rising in 2026?
ATTOM’s 2025 property tax analysis found that the average single-family home property tax bill rose 3% from the prior year, and the national effective tax rate rose to 0.9%.
Which states have the highest property tax burden?
ATTOM reported the highest effective property tax rates in Illinois, New Jersey, Vermont, Connecticut and Ohio in 2025.
Can my mortgage payment go up because of property taxes?
Yes. If your mortgage payment includes escrow for property taxes and insurance, the CFPB says your monthly payment can change when taxes or insurance premiums change.
Should buyers use the seller’s current tax bill?
Not as the only estimate. A buyer’s tax bill may change after purchase because of reassessment, exemptions or local rules.
Can homeowners appeal a property tax assessment?
Often, yes, but rules and deadlines vary by jurisdiction. Homeowners should check their local assessor’s office for appeal procedures.
Sources with clickable URLs
- [ATTOM — 2025 Property Tax Analysis](https://www.attomdata.com/news/market-trends/home-sales-prices/2025-annual-tax-report/)
- [CFPB — Why Did My Monthly Mortgage Payment Go Up or Change?](https://www.consumerfinance.gov/ask-cfpb/why-did-my-monthly-mortgage-payment-go-up-or-change-en-213/)
- [CFPB — What Is an Escrow or Impound Account?](https://www.consumerfinance.gov/ask-cfpb/what-is-an-escrow-or-impound-account-en-140/)
—
