Property Taxes in 2024: Trends and Impacts of Rising Values
As of 2024, the average effective tax rate for properties has seen a slight decrease, now standing at 0.86%. This follows a year where property values experienced an unusual decline, marking a significant rebound in the housing market.
Home Values and Their Impact on Taxes
In 2024, the average home value across the United States reached $486,456, exhibiting a 4.8% increase from the previous year. This rise comes after a 1.7% decrease in 2023, which was notable as one of the few declines in recent years.
Despite concerns that higher property values could trigger increased tax liabilities for homeowners, ATTOM CEO Rob Barber emphasized that the situation is often more complex. He stated, “While rising home values can influence property taxes, they don’t automatically lead to higher bills for homeowners.” Barber pointed out that factors such as escalating costs for local governance and educational institutions, as well as varying tax distribution practices, also play crucial roles.
Geographic Disparities in Tax Burdens
Significant regional differences remain in effective tax rates across the United States. The Northeast and Midwest continue to impose the highest tax burdens, with Illinois leading the way at an effective rate of 1.87%. Other states with high rates include:
- New Jersey: 1.59%
- Connecticut: 1.48%
- Nebraska: 1.32%
- Ohio: 1.31%
Conversely, states in the South and West report the lowest average tax rates. Hawaii has the lowest at 0.33%, followed by:
- Idaho: 0.41%
- Arizona: 0.41%
- Alabama: 0.41%
- Delaware: 0.43%
When considering total tax bills, Northeast homeowners carry the heaviest financial burden. New Jersey homeowning residents paid an average of $10,135 in property taxes, the highest in the country. This stands in stark contrast to West Virginia, where the average tax bill was only $1,027. Additional states with high average bills include:
- Connecticut: $8,402
- New Hampshire: $7,723
- Massachusetts: $7,720
Meanwhile, Alabama ($1,200) and Arkansas ($1,397) are among the states with the lowest average bills.
Trends at the Metro Level
Focusing on metropolitan areas with populations exceeding 200,000, a notable trend is present in the Midwest, which accounts for 16 of the 25 highest effective tax rates. Specifically, Rockford, Illinois, reported the highest rate at 2.06%, followed closely by:
- Chicago: 1.91%
- Peoria, Illinois: 1.89%
- Trenton, New Jersey: 1.88%
On the contrary, Southern metros recorded the lowest effective rates, with Salisbury, Maryland leading at 0.29%. Other low-rate cities include:
- Johnson City, Tennessee: 0.33%
- Knoxville, Tennessee: 0.33%
- Tuscaloosa, Alabama: 0.33%
Among major cities (with populations exceeding one million), Raleigh, North Carolina, experienced the largest surge in average tax bills at 21.1%. This was followed by:
- Honolulu, Hawaii: 17.2%
- New Orleans: 16%
Conversely, cities such as Charlotte and Atlanta saw declines in tax bills, with reductions of 7.3% and 6.4% respectively.
