Where Property Taxes Are Squeezing Households the Most

Rising property taxes are putting increasing strain on U.S. homeowners, and in many states, that strain is showing up in higher delinquency rates. According to the latest Property Tax Delinquency Report from Cotality, the share of homeowners behind on their property tax payments rose to 5.1% in 2025, up from 4.5% in 2024 and above the pre-pandemic low of 4.3% in 2019.

Over that same six-year period, property tax bills have climbed 27%, fueled by rising home values and increased municipal budgets.

How Higher Taxes Hit Homeowners

“Many homebuyers assume that securing a mortgage means locking in stable monthly payments for the long term,” explained Molly Boesel, Senior Principal Economist at Cotality. “But rising home values often lead to higher property taxes. Whether you’re paying off a mortgage or you own your home outright, higher monthly costs can stretch budgets especially for households without steady income or savings.”

In states where unemployment rates are above the national average, property tax delinquencies are rising sharply compared to the U.S. as a whole.

Top States by Increase in Property Tax Delinquencies:

• Mississippi: 13.8%
• New Jersey: 9.9%
• West Virginia: 9.9%
• Washington, D.C.: 9.5%
• New Mexico: 9.4%
• Delaware: 9.3%

Of these, three have higher-than-average unemployment, while two Mississippi and West Virginia have relatively low jobless rates but also low median household incomes, which can make rising tax bills especially burdensome.

Where Homeowners Are Least Impacted

Some states have managed to keep property tax delinquency growth to a minimum, often correlating with stronger job markets.

Lowest Increases in Property Tax Delinquencies:

• Wisconsin: 1%
• North Dakota: 1.1%
• Wyoming: 2.3%
• Minnesota: 2.5%
• Pennsylvania: 2.8%

All five have unemployment rates well below the national average of 4.1%.

Tax Lien vs. Tax Deed States

The report also highlights a structural factor: states that operate under tax lien systems tend to have higher delinquency rates (6.2%) than tax deed states (4.9%). Of the six states with the highest delinquency in 2024, five were tax lien states.

📌 Rising Costs, Rising Risks

With property taxes, insurance premiums, and repair costs all climbing, delinquency rates could continue to rise posing a threat to long-term homeownership, especially for households already on tight budgets.

Cotality’s findings are based on nearly 15 million tax reporting events across about 8 million non-escrowed mortgage loans they service. A delinquency is defined as any overdue property tax payment, regardless of how late it is.

Homeowners Are Worried, Few Are Appealing

A separate survey from Ownwell found that 74% of Americans worry about property taxes, yet few take steps to challenge them. Many doubt the accuracy of their home’s appraised value, and some don’t even know an appeal is possible.

Concern is especially high in states with some of the nation’s highest tax bills:

• Colorado: 85% worry about significant hikes
• New Jersey: 81%
• California: 80%
• New York: 78%

Bottom line: Property taxes are rising faster than many household incomes, and in states with weaker job markets or lower median incomes, that’s translating into higher delinquency rates. Without relief either through tax reform, slower home value growth, or more proactive homeowner appeals the pressure on budgets is likely to keep building. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.