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Posted on 01/07/2026 2:52:07 AM PST by Libloather
In states where property taxes and homeowners insurance costs are rising the fastest, there has been a spike in the number of people who are delinquent on their mortgages, according to real estate analytics firm Cotality.
And an increase in escrow payments may be one of the biggest risks homeowners face in 2026, Cotality warns.
The firm says that escalating escrow costs are reshaping the financial reality of homeownership across the U.S., undermining the predictability once promised by fixed mortgage payments.
"Growing escrow payments can absolutely price would-be homeowners out of buying a home, especially in states where escrow payments make up a large percentage of the monthly cost of homeownership," says Joel Berner, senior economist at Realtor.com®.
What is escrow?
After purchasing a home, your lender may open an escrow account to handle ongoing property costs such as property taxes, homeowners insurance, and, when required, mortgage insurance.
**SNIP**
States where escrow payments are rising the fastest The 10 states where property taxes and homeowners insurance costs are rising the fastest are in the South and the Midwest, Cotality found.
Between 2019 and 2025, Colorado and Florida both recorded escrow payment increases of 77% and 70%, respectively.
"Property taxes have really escalated in Florida due to a rapid increase in property values over the last few years from the [COVID-19] pandemic real estate boom, when you had homes doubling and tripling in value in many cases," Cara Ameer, a Florida real estate agent with Coldwell Banker, tells Realtor.com.
(Excerpt) Read more at realtor.com ...
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Had an escrow account maybe 20 years ago. Didn't enjoy it much, kinda like forced savings. And someone takes the loot about once a year. Could've done that m'self. I believe I got notices about the amount possibly not being enough and I might have to add more loot. Nope, didn't enjoy it.
I’m still not clear on “property tax”…
Why do I have to pay tax on something I own?
That sounds like… Rent to the state… that sounds an awful lot like something Karl Marx wrote… actually, it IS what Karl Marx wrote….
But that’s just me thinking again…
Any home owner know insurance and real estate taxes go up pretty much every year so it’s not a hidden cost but it is an unknown rising cost. My taxes have gone from 1800 to 3400 in 6 years... completely asinine.
What’s really hurting a lot of younger buyers is that they are buying new build homes, and initially taxed only on the empty lot that the home was built on. A few months or a year after they buy it, the lot gets reassessed, and now that it has a home on it, the taxes are tripled or worse. It just smokes them every time. And somehow, it seems neither the agent nor the bank ever warned them this would happen.
This is silly. Escrow accounts aren’t that expensive in and of themselves. It’s what is needed to fund them for property taxes, insurance etc. Without escrow accounts, these same people wouldn’t be able to pay for these things separately either.
“Any home owner know(s) insurance and real estate taxes go up pretty much every year so it’s not a hidden cost but it is an unknown rising cost.”
I live in Montana and we have a very unusual situation in our state: for most of it’s history Montana always had Democrat Senators and Reps, with rare exception. Conrad Burns was the first Republican Senator ever to be reelected in ‘94.
Currently both houses of the state government are in Republican control, we have a GOOD Republican Governor, we expanded from one US Rep to two and they are both Republicans and we have two Republican Senators!
A few years ago the state legislator passed a bill to ‘reassess property’ every two years and have the assessed value the ACTUAL RETAIL VALUE (sounds scary) — however during this process the value of all ‘mils’ assessed to property were to be lowered accordingly...
This year our property taxes were lowered 5% while our home increased 20% (I know this to be true because I have the 4 x 6 assessment cards from the state from 2 1/2 years ago and our recent one from two months ago). It’s good to live in a sane state.
As for insurance it keeps ticking up,..we have car and home insurance via Costco and have been with them for 15 years. This company gives us discounts and has lowered our insurance (while increasing the value of our structure) about 10% this last year. We have excellent credit, no accidents and no home ‘incidents’ which helps. Last summer we removed our shake roof and replaced it with a very high end asphalt roof — that increased our home insurance $20.00.
I feel bad for the folks in Florida and other southern states with the huge weather issues...
The rise in insurance and tax escrow lags the increase in the sale value of your property.
There is no way to affect the tax escrow but you can maintain a constant value of the insurance escrow by under insuring
When we lived in upstate NY, we had paid our house off five years before we escaped. Our property and school tax totalled $10K per year - we were paying the equivalent ~$900 a month (we paid biannually) for the right to live in our home.
We love NC where we live now, but we pay ~$100/year per car that we own for the right to keep our vehicle registrations - that’s a property tax above our annual registration.
Yes, my feeble mind feel better paying a little bit for the right to register our cars than it did paying for the right to live in a home we owned, but the principles are exactly the same and exactly as you point out - the Marxist principle of paying rent to the State.
In the 25 years I’ve owned my home the taxes have increased about $200-$300. Not that bad. The homeowners insurance however has about doubled.
They slip this communist crap in under the radar, and it’s a time bomb waiting to go off.
And nobody seems to give a crap.
Calling it “escrow costs’ hides what it is. The spikes are in property taxes and homeowners’ insurance costs.
For example, by the time my mortgage is paid off, the cost of property taxes and insurance will be the same as the full mortgage payment was in 2012. It’s outrageous. Hopefully, we’ll have moved out of NJ by then.
State numbers obscure a lot of critical data.
Within states there are some very high and much lower tax jurisdictions—so much so that you can live in a “high tax” state and pay less than the average in a “low cost” state.
Our newest neighbor in our very rural CT town just moved here from NJ.
Their property taxes got cut in half—and their new home is almost double the square feet and their property size went from one quarter acres to three acres.
Yet—the “average” NJ and CT amounts are not that different. In CT it is the wealthy suburbs that pay the insanely high property taxes.
To quote Mark Twain, “there are lies, damned lies, and statistics.”
COPS/DEPUTIES
STREET LIGHTS
FIREMEN
STREETS
TRAFFIC LIGHTS
BUS STOPS
SCHOOLS
LIBRARIES
ETC ETC ETC..
ONCE BUILDING PERMITS ARE ISSUED & SIGNED OFF—WITH COMPLETION-—THE COUNTY USUALLY IMMEDIATELY CHANGES THE PROPERTY TAXES
VEHICLE INSURANCE IS DRIVEN HIGHER BY ILLEGALS THAT ARE NOT LICENSED OR INSURED...
GOSH I DID NOT KNOW THIS!
HAVEANICEDAY!
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