North Texas property taxes dropped in 2021, even as real estate prices soared
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The average tax on a single-family home in Dallas decreased 12.2% last year. That's despite the homebuying frenzy that drove up housing prices 16%, according to a new report from ATTOM.
The big picture: Total property taxes collected in 2021 rose only 1.6% nationwide — well down from the 5.4% increase from 2019 to 2020, and the second-smallest rise over the past five years, per Jennifer A. Kingson, author of Axios What's Next.
Zoom out: Property taxes rose steeply in cities like Nashville (27%), Milwaukee (18.6%), Baltimore (12.3%), Grand Rapids, Mich. (12.3%) and Louisville, Ky. (11%).
- Other markets with the largest decreases in average property taxes included Pittsburgh (-35.1%), New Orleans (-20.2%), Houston (-18.7%) and Austin (-7.7%).
Why it matters: The results suggest that local tax authorities weren't keeping up with skyrocketing home price valuations — a trend that could change this year, leaving many homeowners with sticker shock when they get their new bills.
By the numbers: The aggregate amount of property taxes levied on the nation's 87 million single-family homes rose to $328 billion in 2021, up 1.6% from the $323 billion in 2020, according to ATTOM.
- The average tax on a single-family home was $3,785 in 2021, up 1.8% from $3,719 in 2020.
- The latest figures resulted in a nationwide effective tax rate of 0.9%, down from 1.1% in 2020. (The effective tax rate is the average annual property tax expressed as a percentage of the average estimated market value of homes in each geographic area.)
What they're saying: "In 2021, effective rates declined even as total taxes rose because home values went up far faster than taxes around the country," ATTOM explained. "Median values spiked by more than 10% in most of the U.S., as a glut of homebuyers kept chasing a tight supply of homes, pushing the nation’s decade-long market boom onward."
What's next: Rising mortgage rates and the waning of the pandemic could change the dynamics of the housing market, curtailing demand for new homes.