As housing affordability continues to dominate the national conversation in 2026, a new report highlights a critical, often-overlooked expense for homeowners: property taxes. While some residents pay a modest amount to their local governments for the right to own a home, others are shelling out thousands of dollars annually, with the disparity between states growing wider.
According to a new analysis by personal finance website WalletHub, the average U.S. household now pays $3,119 per year in real estate property taxes. The report underscores how heavily location influences a family’s bottom line, advising that prospective movers must weigh tax burdens alongside mortgage rates and home prices.
The study reveals a stark contrast in tax liabilities across the country. Hawaii boasts the lowest effective real estate tax rate at just 0.27%, followed closely by Alabama (0.38%) and Nevada (0.47%).
For a home priced at 2024’s national median home value of $332,700, a homeowner in Hawaii would pay approximately $888 per year.
Conversely, New Jersey has the highest effective property tax rate of 2.11%. It is followed by Illinois (2.01%) and Connecticut (1.81%). In New Jersey, the annual tax bill for that same $332,700 home would be roughly $7,022 — nearly eight times the cost in Hawaii.
On the flip side, despite Hawaii’s low tax rate, it has the highest median home value of $839,100. At that level, the annual taxes work out to $2,239, which ranks 32nd in the nation.
But no matter how you slice it, New Jersey has the highest real estate tax burden. Based on the Garden State’s median home value of $454,400, the 2.11% effective tax rate results in a whopping $9,590 in annual property taxes.
Other locations with high property tax burdens based on the state’s median home value include New Hampshire ($6,667), Connecticut ($6,643), New York ($6,582) and Massachusetts ($5,992).
States with the lowest property taxes based on state-level median home value are Alabama ($788), West Virginia ($865), Arkansas ($1,040) and Louisiana ($1,180).
In comments accompanying the report, Chip Lupo, a WalletHub analyst, emphasized that property tax burdens should be a key factor in relocation decisions.
“Americans who are considering moving and want to maximize the amount of money they take home should take into account property tax rates,” in addition to general cost of living concerns, he added.
