ATTOM’s 2025 Property Tax Analysis reveals a shifting dynamic in the housing market: property taxes are rising even as home values show signs of softening. The findings underscore a critical reality for homeowners, tax burdens are increasingly influenced by local fiscal pressures and policy decisions, not just real estate market conditions.
In 2025, a total of $396.8 billion in property taxes were levied across more than 89.6 million single-family homes, marking a 3.7 percent increase year over year. The typical homeowner saw that impact firsthand, with the average tax bill rising 3 percent to $4,427 on a home valued at approximately $494,231.
At the same time, the national effective tax rate climbed to 0.9 percent, up from 0.86 percent in 2024 and its highest level since 2020. This increase occurred despite a 1.7 percent decline in average home values, signaling a growing disconnect between property prices and tax obligations.
A Growing Divide Across Regions
As in prior years, property tax burdens remain highly regionalized. Homeowners in the Northeast and Midwest continue to face the highest rates, led by Illinois (1.84 percent), New Jersey (1.58 percent), and Vermont (1.4 percent). These elevated rates, combined with relatively high home values in certain markets, produce some of the largest tax bills nationwide.
New Jersey tops the list with an average annual property tax bill of $10,499, far exceeding other states and nearly ten times higher than the lowest-tax markets.
In contrast, homeowners in Western and Southern states benefit from significantly lower tax burdens. States such as Hawaii (0.33 percent), Idaho (0.39 percent), and Wyoming (0.4 percent) continue to offer some of the lowest effective tax rates in the country.
Local Markets Drive Tax Trends
The data also reveals that property tax increases are not isolated to a handful of high-cost regions. Among the 221 metro areas analyzed, more than half (50.2 percent) saw tax bills rise faster than the national average of 3 percent.
Some of the largest increases occurred in markets like Memphis, Baltimore, and Houston, where year-over-year tax bills rose at double-digit rates. These spikes point to the growing influence of local reassessments, budget changes, and infrastructure funding needs on tax outcomes.
At the county level, high tax burdens are also heavily concentrated. Of the 1,500 counties analyzed, 26 reported average property tax bills exceeding $10,000, with a notable share located in New Jersey, California, and New York
Property Taxes and the Affordability Equation
ATTOM’s 2025 findings highlight an important shift in housing affordability. While home prices and mortgage rates often dominate the conversation, property taxes are emerging as a more persistent and, in some markets, escalating cost of homeownership.
Even modest declines in home values are offering limited relief when offset by rising tax bills and higher effective rates. As a result, property taxes are playing an increasingly significant role in shaping affordability—and influencing where buyers choose to live.
Bottom Line: Property taxes are no longer moving in lockstep with home values. Instead, they reflect a more complex mix of local economic conditions, policy decisions, and public spending needs—making them a critical factor to watch in today’s evolving housing market.
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