Dive Brief:
-
Single-family homes in the U.S. generated $277.7 billion in property taxes in 2016 — roughly $3,296 per property at an annual rate of 1.15%, according to HousingWire, citing new data from Attom Data Solutions. New Jersey (2.31%), Illinois (2.13%) and Texas (2.06%) reported the highest rates.
-
Owner-occupied single-family homes reported annual property taxes of $3,658 at a rate of 1.21%. Non-owner occupied homes paid $2,437 annually at a rate of 1.03%.
-
The largest difference in taxes paid by owner- and non-owner-occupied homes occurred in California, Illinois, New York, Ohio and Texas. Ohio, for example, has some of the lowest housing costs in the country but some of the highest property taxes (at a rate of 1.68% in 2016), due in part to more affluent areas raising rates to support schools and other public initiatives.
Dive Insight:
Property taxes are another factor buyers must consider, especially given that the rates tend to indicate investment in other community resources, like public schools and infrastructure. Meanwhile, rising home prices have been a drag on the market, with prices at their highest levels in more than two years. The latest data from CoreLogic put U.S. home prices up 1% from January to February and 7% ahead of a year ago.
First-time buyers, a demographic that accounted for 35% of home sales in 2016, are feeling the strain as they balance factors such as student loan debt, slow wage growth and increasing rental prices, along with a lack of equity from the sale of a previous property — all of which could make it more difficult to save for a down payment.
Owners looking to trade up also face pressure from higher prices. Such move-up activity is a critical part of the market's recovery, with the shift often freeing up older, typically less-expensive properties for entry-level buyers. Yet low resale inventory and high prices have existing owners worried they won't find a new property in time. Still, analysts predict the rate of increase in home prices could begin to taper as more inventory comes online.
For more housing news, sign up for our daily residential construction newsletter.