Property taxes only go up

Property taxes have increased sharply across the country, driven by blockbuster home price growth.

Good afternoon! Was this newsletter forwarded to you? Sign up here. Hello, LOs!   Property taxes have increased sharply across the country, driven by blockbuster home price growth.   Some predict that new inventory might slow that growth. But even a massive increase in inventory wouldn't lower property taxes, since local assessors adjust property values to reflect recent sales. At least one LO has told HousingWire that rising property taxes are making it more difficult for purchase borrowers to qualify for a mortgage.   A recent Fannie Mae working paper found that, on average, homeowners pay $4,104 each year in property taxes. First-time homebuyers pay a little less, about $3,600, while low income first-time homebuyers pay around $3,000.   In the first seven years, for the average purchase borrower in loans Fannie Mae bought in 2020, property taxes will be about 16% of homeowner costs, or $29,000. That's still quite a bit less than the $37,000 in principal the borrower will pay down during the same period, and much less than the $53,000 in total mortgage costs, which includes the guarantee fee, risk-based loan fees and servicing fees.   Property taxes provide about half of all state revenue, according to the Lincoln Institute's recent review of U.S. Department of Commerce data. Even so, lawmakers have at least tried to temper yearly property tax increases — but they have had mixed results.   In Texas, despite the passage of a bill in 2019 that lowered the property tax rate and raised the state's contribution to public education, property taxes rose substantially in the past two years.   Property tax bills in 2021 in Texas were $73 billion, the Texas Tribune reported. Without the new legislation, property taxes would have reached $79 billion.   LOs, how are projected property taxes taken into account when a borrower is looking to qualify for a mortgage? Send a note to georgia@hwmedia.com and tell me what you're seeing.   Georgia Kromrei Senior Mortgage Reporter, HousingWire Home inventory uptick expected within 6 months Real Estate More than 60% of prospective 2022 sellers expect to list their home in the next six months, according to Realtor.com. The Updated Qualia Homebuyer Sentiment Index How do homebuyers find and evaluate their lenders? How can lenders ensure that they meet their borrowers' changing expectations in the year ahead? Find out in the Qualia Homebuyer Sentiment Index. Sponsored by Qualia How should the current market impact lenders' tech adoption? Presented by Polly HousingWire recently sat down with Polly CEO Adam Carmel to discuss how lenders can break old habits and redefine the mortgage process through innovation and modern, advanced technology. FHFA brings foreclosures to a screeching halt for borrowers who applied for Treasury assistance Mortgage, Politics & Money Borrowers with Fannie Mae or Freddie Mac-backed mortgages have been granted an additional two months to avoid foreclosure if they've applied for assistance from the Department of the Treasury. How to get accurate and affordable property valuations in seconds ClearAVM™ allows you to accelerate the valuation process and make smarter decisions with access to 139+ million properties nationwide, including non-disclosure states. Identify risks and get reliable valuations delivered at speed. Try it for free today! Sponsored by Clear Capital Mortgage rates grow at fastest pace since 1994 Mortgage Purchase mortgage rates have risen faster in the last three months than at any time since May 1994. Freddie Mac said purchase rates this week averaged 4.72%, though another index found that rates overall eclipsed 5%. HousingWire, 433 East Las Colinas Blvd., Suite 830, Irving, TX 75039 Manage preferences

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