Information from the U.S. Census Bureau’s quarterly tax data revealed that property owners paid $594 billion in taxes over the four quarters ending in Q1 2019, the National Association of Home Builders reported.
The NAHB states that it has been seven years since the four-quarter property tax revenues declined.
According to the NAHB, the four-quarter growth rate of property tax revenue has slowed in each quarter following accelerating in Q3 and Q4 of 2017. Revenues increased by 18.1%, and corporate tax revenues grew at a faster pace than other tax receipts on an annual basis.
State and local individual income tax revenues increased marginally 1.2%, while property and sales tax collections increased by 3.3% and 5.2%, respectively.
The Census’ information shows that property taxes rose for the second-consecutive quarter, accounting for 39.6% of state and local tax receipts. Income taxes accounted for 28.2%, sales tax was 28%, and corporate taxes was 4.2%.
“The share of property tax receipts among the four major tax revenue sources naturally changes with fluctuations in non-property tax collections,” the NAHB said.
The report states that non-property tax receipts are more sensitive to fluctuations in the business cycle, changes in consumer spending, and job availability.
Property tax collections have proven to be “relatively stable,” reflecting a long-run of stability of tangible property values, as well as the smoothing effects of lagging assessments and annual adjustments.
“Property tax receipts are the least volatile revenue source, followed by sales taxes, individual income taxes, and corporate income taxes, in order of increasing volatility,” the report states.
While affordability has been an issue nationally, the consumers’ homebuyer power increased in June by 3.3% from the prior month and has risen 12.2% year-over-year, according to First American Financial Corporation’s Real House Price Index (RHPI).
First American reported that household income increased 2.4% annually and 56.4$ since January 2000. Home prices are 18% less expensive than in January 2000.
“Two of the three key drivers of the [RHPI] household income and mortgage rates, swung in favor of increased affordability in June. The 30-year, fixed-rate mortgage fell by 0.8-percentage points and household income increased 2.4% compared with June 2018,” said Mark Fleming, Chief Economist at First American. “When household income rises, consumer house-buying power increases. “Declining mortgage rates have a similar impact on affordability, so in June home buyers received a double shot of house-buying power to jolt affordability in their favor nationally.”