Home Price Appreciation Benefits Some Homeowners but Leaves Many More Scrambling

National home price growth is benefitting some homeowners with high equity and home price appreciation, but others who are struggling to make their mortgage payments are at a higher risk of losing their homes to foreclosure as property taxes rise, according to PR Newswire.

Property tax increases are causing foreclosure rates to rise in states where homeowners are already facing high unemployment rates, income inequality, and large debt-to-income ratios. In 2021, states like Virginia, Georgia, and New York reported the largest increases in foreclosures as property values appreciated between 18-21% while property taxes increased at an average of 9%,14%, and 21%, respectively.

The nation's double-digit home price appreciation, which has pushed homeowner's equity to record highs, isn't necessarily good news for all homeowners. A new analysis released today by Knock, the fast-growing digital homeownership platform that brings certainty and convenience to buying and selling homes, finds that while the nation's recent home price growth is the shot in the arm for homeowners struggling with underwater mortgages since the Great Recession, for others the Covid-induced housing boom is resulting in higher tax burdens they can't afford.

As a result, real estate-owned foreclosures have increased in states like Virginia, Georgia and New York throughout 2021, while they've fallen in New Jersey, Mississippi, Delaware, Connecticut and New Mexico -- a trend that will likely continue now that the government's forbearance program has ended.

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