Homeowners are paying more in property taxes even as home values fall

The average U.S. homeowner paid $4,427 in property taxes last year, a 3.7% increase from 2024, even as home values declined. That rise outpaced inflation, which saw the Consumer Price Index climb just 2.7% over the same period. The trend defies the assumption that property tax bills follow home values: the average estimated value of a single-family home dropped 1.7% to $494,231, yet taxes continued to climb.

Property taxes are driven less by market prices and more by local government funding demands. Municipalities set rates to cover rising costs for schools, infrastructure, police and fire departments—expenses that persist or grow regardless of housing market trends. As ATTOM CEO Rob Barber noted, these taxes reflect local budgets, not consumer inflation. In 40 states and the District of Columbia, that translated into higher bills last year.

Some states saw far steeper increases: Delaware homeowners faced an 18% jump in property taxes, while Maryland saw an 11.6% surge. At the same time, 10 states recorded declines, largely due to policy changes. Wyoming cut taxes by 25% for homes valued up to $1 million. In Montana, about 8 in 10 homeowners received a tax reduction following a new rebate system and tiered tax structure.

The heaviest burden fell in the Northeast, California and Illinois. New Jersey homeowners paid the most nationwide—an average of $10,500 annually. West Virginia had the lowest average levy at $1,081 per home. These disparities underscore how local fiscal policy, not just property wealth, shapes what homeowners owe.