The nationwide property tax delinquency charge accelerated final yr, with information indicating potential rising monetary pressure amongst some segments of mortgage debtors.
The share of property tax delinquencies throughout the U.S. elevated to five.1% in 2024, rising from 4.5% one yr earlier, in accordance with a brand new report from actual property information supplier Cotality. The analysis evaluation solely lined the roughly 8 million mortgages the place tax and insurance coverage funds will not be held in a separate escrow fund.
While the rise raises concern about some debtors’ capacity to pay, the 2024 charge nonetheless got here in beneath the latest historic common of 5.5% from 2012 to 2025. The final yr property tax delinquencies surpassed 2024’s degree was in 2017, when it got here in at 5.5%. By comparability the delinquency share sat at 8.2% in 2012 after the Great Financial Crisis.
But rising home prices up to now six years have equally elevated mortgage holders’ monetary burdens within the type of greater taxes owed. Since an all-time low delinquency degree of 4.3% was recorded in 2019, the quantity of property taxes owed has elevated 27% on a nationwide foundation, Cotality discovered.
“Many homebuyers assume that securing a mortgage means locking in secure month-to-month funds for the long run. However, rising home values usually result in greater property taxes, and over the previous six years, this has develop into a actuality for a lot of householders,” stated Molly Boesel, Cotality’s senior principal economist, in a press launch.
Tax totals surged by greater than 50% for householders in Colorado and Georgia. At the identical time, states the place common quantities due require the largest share of a family median earnings had been Vermont and Illinois at 11.2%.
“Whether they’re paying off a mortgage or personal their home outright, rising month-to-month prices can put stress on family budgets. Those with out ample monetary buffers, such as regular earnings or financial savings, could discover themselves struggling to maintain up with rising tax payments,” Boesel continued.
How delinquencies range by state
Parts of the nation the place the best charge of tax delinquencies appeared in 2024 had been unfold throughout the U.S., led by Mississippi with a 13.8% share, adopted by New Jersey and West Virginia at 9.9% every. The District of Columbia and New Mexico rounded out the highest 5 at 9.5% and 9.4%.
With the exception of the nation’s capital, all the main states additionally rank among the many high 5 within the historic 2012-to-2023 timeframe.
State unemployment charges correlated strongly with householders’ capacity to maintain up with property tax collections, Cotality stated. States with the best share of overdue funds additionally tended to have unemployment charges above the nationwide 4.1% common. Three of the highest six reported unemployment charges greater than the present imply.
On the opposite finish, states the place unemployment got here in beneath the nationwide common additionally ranked on the low finish of property tax delinquency charges. Wisconsin had the smallest delinquency charge at 1%, adopted by North Dakota at 1.1% and Wyoming at 2.3%. The three states additionally rank among the many main states for the bottom delinquency shares traditionally.
Cotality additionally discovered variation in delinquency charges between tax-lien and tax-deed states. In tax-lien states, the place a property won’t be bought until the proprietor fails to repay the lien in a set time period, the share of delinquencies was 6.2% in 2024. The quantity fell to 4.9% amongst tax-deed jurisdictions, the place native governments are capable of promote the properties to cowl the excellent debt.
While housing researchers repeatedly word that the efficiency of the U.S. mortgage market stays stable, the rise in property tax delinquency ranges corresponds with rising stress that has proven up in some pockets of mortgage debtors.
Loan delinquencies elevated 5.2% yr over yr in May, ICE Mortgage Technology reported. Accounting for a lot of the rise had been late funds on Federal Housing Administration-guaranteed mortgages usually taken out by first-time homebuyers.
While FHA-backed loans make up roughly 12% of the U.S. mortgage market, they account for greater than one-third of delinquent debt, in accordance with information from the Federal Reserve Bank of New York.
