U.S. Property Taxes Rise 3% in 2025 Despite Home Value Decline

Event summary

  • $396.8 billion in property taxes levied on 89.6 million single-family homes in 2025, up 3.7% from 2024.
  • Average single-family home value dropped 1.7% to $494,231, but tax bills rose 3% to $4,427.
  • Effective tax rate increased to 0.9%, highest since 2020.
  • Northeast and Midwest states had the highest effective tax rates, led by Illinois (1.84%) and New Jersey (1.58%).
  • Western states had the lowest effective tax rates, with Hawaii at 0.33% and Idaho at 0.39%.

The big picture

The rise in property taxes despite a decline in home values highlights the growing burden of local government costs and shifting tax policies. This trend underscores the need for homeowners and investors to closely monitor regional tax disparities and potential policy changes. The data suggests that property taxes are influenced by factors beyond home values, including local government spending and tax policy adjustments.

What we're watching

Regional Disparities
How persistent regional tax disparities will impact home affordability and migration patterns.
Tax Policy Shifts
Whether local governments will adjust tax policies in response to declining home values.
Market Trends
The pace at which property tax rates will continue to rise amid fluctuating home values.