Americans Paid Higher Property Taxes In 2025 Even As Home Prices Cooled Off, Study Finds

by | Apr 10, 2026 | General

American homeowners paid more in property taxes in 2025 even as their home values declined, with local government costs and shifting tax policies driving bills higher regardless of market conditions, according to ATTOM’s annual property tax analysis published Thursday.

The Tax Bill Climbed Anyway

Property taxes levied on single-family homes across the United States rose 3.7% to $396.8 billion in 2025, covering more than 89.6 million homes. The average bill reached $4,427, a 3% increase over 2024, while the average estimated home value fell 1.7% to $494,231 over the same period. The result: the national effective tax rate rose to 0.9%, its highest since 2020.

“Even with a slight dip in prices, higher tax bills combined with declining home values led to an increase in effective tax rates, underscoring the role of local government costs and shifting tax policies,” said Rob Barber, CEO at ATTOM.

Where The Burden Falls Hardest

Illinois (1.84%), New Jersey (1.58%), and Connecticut (1.36%) carried the highest effective rates in 2025. New Jersey’s average annual bill of $10,499 was nearly ten times West Virginia’s $1,081 — the nation’s lowest. Memphis, Tennessee, saw the sharpest single-year surge among major metros, with average bills jumping 34%, followed by Baltimore at 27%.

Broader Economic Context

The increase comes as U.S. economic growth slowed to an annualised 0.5% in the fourth quarter of 2025, down from 4.4% in the prior quarter, the Bureau of Economic Analysis reported. Personal income fell 0.1% in February, while consumer spending rose 0.5%. Core PCE inflation, the Federal Reserve’s preferred gauge, rose 3.0% year-on-year in February, a full percentage point above its 2% target. Crude oil later moved above $100 a barrel amid rising Middle East tensions.

The IMF described the energy shock as a “large, sudden tax on income” for fuel-importing economies, warning across scenarios of higher inflation and slower growth.

At the federal level, President Donald Trump’s fiscal 2027 budget proposes a 44% increase in defense spending to $1.5 trillion and a 10% cut in non-defense domestic programmes. It does not propose changes to major entitlement programmes such as Social Security and Medicare, even as federal debt exceeds $39 trillion.

Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.

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