(NEXSTAR) – Owners of almost 87 million single-family homes in the U.S. forked over $328 billion in effective property taxes during 2021, up 1.6 percent from 2020, according to a new study.
While the total tax burden may sound large, the percent increase wasn’t, according to ATTOM, a real estate data company. In fact, it was the second smallest increase over the past five years – from 2019 to 2020, for example, the increase was 5.4%.
ATTOM calculated the effective tax rate in states and major U.S. metros by taking the average annual property tax as a percentage of the “average estimated market value of homes in each geographic area.”
Considering how much property values skyrocketed during the pandemic, experts warn that taxes may soon follow behind.
“It’s hardly a surprise that property taxes increased in 2021, a year when home prices across the country rose by 16%,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “In fact, the real surprise is that the tax increases weren’t higher, which suggests that tax assessments are lagging behind rising property values, and will likely continue to go up in 2022.”
In some major metros, however, the tax rate jumped up substantially. Among those areas with at least 1 million people, Nashville, Tennessee saw the biggest jump last year (27%), followed by Milwaukee, Wisconsin (18.6%); Baltimore, Maryland (12.3%); Grand Rapids, Michigan (12.3%); and Louisville, Kentucky (11%).
The effective rate went down in some places, with these metros leading the rankings: Pittsburgh, Pennsylvania (-35.1%); New Orleans, Louisiana (-20.2%); Houston, Texas (-18.7%); Dallas, Texas (-12.2%); and Austin, Texas (-7.7%).
The analysis also looked at the highest effective property tax rate by state:
- Illinois (1.86%)
- New Jersey (1.73%)
- Connecticut (1.67%)
- Vermont (1.55%)
- Pennsylvania (1.37%)
- Nebraska (1.36%)
- New Hampshire (1.35%)
- New York (1.35%)
- Texas (1.31%)
- Iowa (1.31%)
The lowest effective property tax rates in 2021 were found in :
- Hawaii (.27%)
- Alabama (.37%)
- Utah (.39%)
- Arizona (.41%)
- Nevada (.41%)
- Idaho (.43%)
- Colorado (.43%)
- Tennessee (.45%)
- West Virginia (.5%)
- South Carolina (.5%)
Meanwhile, the average price of a home in the U.S. continues to climb with the median cost jumping 15% to $375,300 in March from a year ago, an all time high according to the National Association of Realtors.