Homebuyers in the U.S. have faced significant challenges in recent years due to a combination of high demand, limited housing inventory, and rising home prices. Adding to the burden, property taxes have risen sharply since 2020 alongside home values. This has led to higher housing costs, even for those with fixed-rate mortgages or fully paid-off homes, according to Construction Coverage.
Regionally, the Northeast and Midwest have the highest property tax rates, with Illinois and New Jersey leading the way, with respective property tax rates of 1.825% and 1.773%. These areas, often older or more densely populated, require higher revenue for infrastructure and services. Meanwhile, the South and Mountain West typically have the lowest rates, with Hawaii and Alabama at the bottom of the list. However, Texas stands out with a relatively high rate of 1.356%, ranking seventh nationwide.
City-level differences also mirror these trends. Trenton, NJ, has the highest effective property tax rate of any U.S. city at 2.653%, while Montgomery, AL, has the lowest at 0.277%. Cities in Illinois, New Jersey, and Connecticut dominate the top ranks, while cities in Alabama, Louisiana, and Hawaii are among those with the smallest property tax burdens. Read more