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.
Advertisement
Related Stories
Single-Family Homes
What Does It Cost to Build a Single-Family Home?
A closer look at the itemized costs in each stage of construction for a single-family home
Builders
A Look at the Boom in Home Builder Stocks During 2023
In 2023, stocks for the 10 biggest U.S. home builders outperformed the S&P 500. What does that say about the housing market?
Financials
Housing Demand Could Rebound in 2024 as Mortgage Rates Ease
The Mortgage Bankers Association predicts lower mortgage rates could bring homebuyers back into the market in 2024