According to ATTOM’s newly released 2021 property tax analysis for almost 87 million U.S. single family homes, over $328 billion in property taxes were levied on single-family homes in 2021, up just 1.6 percent from $323 billion in 2020. That was well down from the 5.4 percent increase seen from 2019 to 2020 and marked the second smallest rise over the past five years.
Meanwhile, the average tax on single-family homes in the U.S. in 2021 increased at the smallest pace in the five years, rising 1.8 percent from $3,719 in 2020 to $3,785 last year. The latest figures resulted in an effective tax rate of 0.9 percent, down from 1.1 percent in 2020.
“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 2021, effective rates declined even as total taxes rose because home values went up far faster than taxes around the country. Median values spiked by more than 10 percent in most of the U.S., as a glut of home buyers kept chasing a tight supply of homes, pushing the nation’s decade-long market boom onward. The buyer surge continued as home-mortgage rates hovered around 3 percent and many households continued to trade congested areas more susceptible to the two-year-old Coronavirus pandemic, for the relative safety and larger spaces offered by houses and condominiums.