Property Tax Revenue Outpaces Other Sources in 2024

2025-03-26T08:17:50-05:00

Property tax revenue collected by state and local governments reached a new high in 2024 and continued to make up a bulk of tax revenue. Total tax revenue for state and local governments also reached a high after falling in 2023, driven by higher revenue across all sources. In 2024, tax revenue totaled $2.095 trillion, up 4.6% from $2.004 trillion in 2023. According to the Census Bureau’s Quarterly Summary of State and Local Taxes, state and local property tax revenue totaled $797.0 billion (38.0%), up 8.2% from the prior year. Individual income tax totaled $537.4 billion (25.6%), up 4.7% over the year. Corporate income tax totaled $174.5 billion (8.3%), up 0.2% and general sales tax revenue was up 1.2% to $587.0 billion (28.0%) in 2024. State Level Detail Separating out this summary to just the state level, property taxes accounted for only 1.6% of state tax revenue in 2024, totaling $24.3 billion. State tax revenue is mostly comprised of individual income tax and general sales tax, with individual income tax reaching $490.7 billion (32.9%) and general sales tax at $470.0 billion (31.5%) in 2024. Additionally, the state where government tax revenue was most reliant on property tax was Vermont, where approximately 27.7% of the state’s tax revenue was from property tax. Seventeen states did not collect any tax revenue in the form of property tax. This means that for property tax within a state, all collections essentially remain at the local government level. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Property Tax Revenue Outpaces Other Sources in 20242025-03-26T08:17:50-05:00

Consumer Expectations Fall Again

2025-03-25T16:18:41-05:00

Consumer confidence fell for the fourth straight month amid growing concerns about the economic outlook and policy uncertainties, especially potential tariffs. Uncertainties continue to weigh on consumer sentiment as consumer confidence dropped to a 4-year low and expectations for the future economy fell to a 12-year low. The persistent decline in sentiment has raised recession concerns as consumers have grown pessimistic about economic conditions. The Consumer Confidence Index, reported by the Conference Board, is a survey measuring how optimistic or pessimistic consumers feel about their financial situation. This index fell from 100 to 92.9 in March, the largest monthly decline since August 2021 and the lowest level since February 2021. The Consumer Confidence Index consists of two components: how consumers feel about their present situation and about their expected situation. The Present Situation Index decreased 3.6 points from 138.1 to 134.5, and the Expectation Situation Index dropped 9.6 points from 74.8 to 65.2, the lowest level since February 2013. This is the second consecutive month that the Expectation Index has been below 80, a threshold that often signals a recession within a year. Consumers’ assessment of current business conditions turned negative in March. The share of respondents rating business conditions “good” decreased by 1.4 percentage points to 17.7%, while those claiming business conditions as “bad” rose by 1.8 percentage points to 16.7%. However, consumers’ assessments of the labor market improved slightly. The share of respondents reporting that jobs were “plentiful” remained unchanged at 33.6%, and those who saw jobs as “hard to get” decreased by 0.3 percentage points to 15.7%. Consumers were pessimistic about the short-term outlook. The share of respondents expecting business conditions to improve fell from 20.8% to 17.1%, while those expecting business conditions to deteriorate rose from 25.5% to 27.3%. Similarly, expectations of employment over the next six months were less positive. The share of respondents expecting “more jobs” decreased by 2.1 percentage points to 16.7%, and those anticipating “fewer jobs” climbed by 1.9 percentage points to 28.5%. The Conference Board also reported the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home rose slightly to 5.4% in March. Of those, respondents planning to buy a newly constructed home increased to 0.5%, and those planning to buy an existing home dropped to 2.3%. The remaining 2.6% were planning to buy a home but undecided between new or existing homes. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Consumer Expectations Fall Again2025-03-25T16:18:41-05:00

Slight Decline in Rates Helps New Home Sales to Edge Higher in February

2025-03-25T11:15:54-05:00

Sales of newly built, single-family homes in February increased 1.8% to a 676,000 seasonally adjusted annual rate from a revised January number, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales in February was up 5.1% compared to a year earlier.

Slight Decline in Rates Helps New Home Sales to Edge Higher in February2025-03-25T11:15:54-05:00

Lower Mortgage Rates, Better Affordability

2025-03-24T11:19:31-05:00

As housing affordability remains a critical challenge across the country, mortgage rates continue to play a central role in shaping homebuying power. Mortgage rates stayed elevated throughout 2023 and early 2024. Recent data, however, shows a modest decline in mortgage rates. Even slight declines can have a significant impact on housing affordability, pricing more households back into the market. New NAHB Priced-Out Estimates show how home price increases affect housing affordability in 2025. This post presents details regarding how interest rates affect the number of households that can afford a median priced new home. At the beginning of 2025, with the average 30-year fixed mortgage rate at 7%, around 31.5 million households could afford a median-priced home at $459,826. This requires a household income of $147,433 by the front-end underwriting standards[1]. In contrast, if the average mortgage rates had remained at the recent peak of 7.62% in October 2023, only 28.7 million households would have qualified. This 62-basis point decline has effectively priced 2.8 million additional households into the market, expanding homeownership opportunities. The table below shows how affordability changes with each 25 basis-point increase in interest rates, from 3.75% to 8.25% for a median-priced home at $459,826. The minimum required income with a 3.75% mortgage rate is $110,270. In contrast, a mortgage rate of 8.25%, increases the required income to $163,068, pushing millions of households out of the market. As rates climb higher, the priced-out effect diminishes. When interest rates increase from 6.5% to 6.75%, around 1.13 million households are priced out of the market, unable to meet the higher income threshold required to afford the increased monthly payments. However, an increase from 7.75% to 8% would squeeze about 850,000 households out of the market. This exemplifies that when interest rates are relatively low, a 25 basis-point increase has a much larger impact. It is because it affects a broader portion of households in the middle of the income distribution. For example, if the mortgage interest rate decreases from 5.25% to 5%, around 1.5 million more households will qualify the mortgage for the new homes at the median price of $459,826. This indicates lower interest rates can unlock homeownership opportunities for a substantial number of households. [1] . The sum of monthly payment, including the principal amount, loan interest, property tax, homeowners’ property and private mortgage insurance premiums (PITI), is no more than 28 percent of monthly gross household income. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Lower Mortgage Rates, Better Affordability2025-03-24T11:19:31-05:00

People Not in the Labor Force

2025-03-24T10:17:03-05:00

According to the U.S. Bureau of Labor Statistics (BLS), people who are neither working nor looking for work are counted as “not in the labor force”. Understanding the size and characteristics of individuals not in the labor force is crucial for a comprehensive assessment of the job market and overall economic health, as it provides insights into potential labor supply and demand issues. Size The number of people not in the labor force has been steadily increasing. As of February 2025, data from the BLS indicates that 102.5 million people, aged 16 or older, were not in the labor force. During the COVID-19 pandemic, this figure surged sharply, rising from 95.2 million in February 2020 to a historically high 103.6 million in April 2020. Since then, the number has remained around 100 million, with a noticeable upward trend over the past year. Characteristics Data from the 2024 Current Population Survey (CPS) and the Annual Social and Economic Supplement (ASEC) offer valuable insights into why individuals are not in the labor force. The ASEC gathers information on employment and unemployment experienced during the previous calendar year. The data used in this article focus on individuals aged 16 years and older who neither worked nor looked for a job in 20231. According to the analysis of the data from the 2024 CPS and ASEC, approximately 93.6 million people aged 16 or older were not in the labor force in 2023. Among this group, nearly 39 million (42%) were men, and 54.6 million (58%) were women. In terms of age distribution, about 49% of those not in the labor force were aged 65 years or older. Additionally, 13% were between the ages of 55 and 64, 21% were between the ages of 25 and 54, and the remaining 17% were aged 24 or younger. Intuitively, people aged 65 years and older represented the largest share of individuals who were not in the labor force. Regarding educational attainment, 51% of individuals not in the labor force had a high school diploma or lower. Those with some college education made up 24%, while individuals with a bachelor’s degree or higher accounted for 25%. The racial breakdown of those not in the labor force is as follows: 58.2 million were non-Hispanic white, 15.4 million were Hispanic, 11.7 million were Black, 5.9 million were Asian, and the remaining 2.5 million identified as other races. Main Reason for Not Working The group of people not in the labor force is diverse, and the reasons why individuals are not in the labor force vary widely. In the CPS and ASEC data2, the respondents were asked the main reason for not working. The reasons included: ill or disabled, retired, taking care of home or family, going to school, could not find work and other. In 2023, a total of 93.6 million individuals aged 16 and older neither worked nor looked for work at any time during the year. Among this group, 48.6 million people reported retirement as their main reason for not working. Approximately 14.9 million individuals stated that they were attending school, while 14.7 million cited illness or disability as the main factor. Additionally, 12.7 million people indicated that taking care of home or family was the main reason for not working in 2023. Nearly 1.8 million individuals selected “other reasons,” and roughly 1.0 million cited “could not find work.” Retirement is the main reason for not working for about half of the individuals not in the labor force in 2023. Among those aged 65 years and older, 91% of individuals in this group cited retirement as the main reason for not working. Overall, about 44% of individuals not in the labor force were due to the self-reported reason of retirement and aged 65 years and older. Individuals in this 44% share are unlikely to return to the labor force. While an aging population is a major driver behind the growth of individuals not participating in the labor force, other reasons people give for not engaging in the workforce also play an important role. For individuals aged 16 to 24, the majority cited going to school as the main reason not working in 2023. In other words, for those citing going to school, 87% were between the ages of 16 and 24. Overall, about 14% of the not-in-labor-force population was due to the self-reported reason of going to school and aged 16 to 24. This group is likely to enter the labor force after graduation, although younger individuals will likely replace them in education settings. Prime-age workers, aged 25 to 54, historically represent a larger share of the labor force compared to other age groups. However, men and women in this age group have different reasons for not working in 2023. More than half of women (62%) reported taking care of home or family as the main reason for not working, while 48% of men cited illness or disability as their primary reason. Among prime-age individuals, those with less education were more likely to be out of the labor force than their more educated counterparts. In 2023, 15% of prime-age men with a high school diploma or less were not in the labor force, compared to 10% of those with some college and 5% of those with a bachelor’s degree or higher. The trend was similar among prime-age women, with 33% of those with a high school diploma or less not in the labor force, compared to 20% of those with some college and 13% of those with a bachelor’s degree or more. It is difficult to predict with certainty whether prime-age individuals currently not in the labor force will enter it. However, several factors could encourage individuals to enter or return to the labor market, including improved economic conditions, the availability of remote work, workplace policies, and retraining opportunities. Last, based on the CPS and ASEC data, only a small proportion of the remaining population reported the main reasons for not working were that they could not find work and other reasons. Conclusion These numbers highlight both challenges and opportunities in expanding the labor force to support construction employment. According to the BLS’s monthly job report, approximately 6% of individuals currently not in the labor force and aged 16 to 64 could potentially be recruited into the workforce. Furthermore, the construction labor force is aging. The building industry must recruit the next generation of workers as industry activity grows in the years ahead, given the growth in population not in the labor force. For more information on the CPS Annual Social and Economic Supplement (ASEC), see “Annual Social and Economic Supplements,” U.S. Census Bureau, last revised September 4, 2024, https://www.census.gov/data/datasets/time-series/demo/cps/cps-asec.html.Respondents who reported “no” to the following first three questions were considered to be not in the labor force and a fourth question asked about the main reason for not working: “Did ____work at a job or business at any time during 20__?” “Did ____ do any temporary, part-time, or seasonal work even for a few days in 20__?” “Even though ____did not work in 20__, did ____spend any time trying to find a job or on layoff?” “What was the main reason __did not work in 20?” Ill or disabled Retired Taking care of home or family Going to school Could not find work Other Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

People Not in the Labor Force2025-03-24T10:17:03-05:00

Home Innovation Research Lab Reaches 600,000-Home Milestone in NGBS Certification Program

2025-03-24T10:15:49-05:00

NGBS provides home builders with a national standard to define and measure sustainable multifamily and single-family homes, developments and remodeling projects. It is administered by the Home Innovation Research Lab and can offer consumers a level of confidence they are purchasing an independently verified green home.

Home Innovation Research Lab Reaches 600,000-Home Milestone in NGBS Certification Program2025-03-24T10:15:49-05:00

Cost and Tariff Uncertainty Weighs on Markets

2025-03-21T09:21:58-05:00

Equity markets are in correction territory as investors react to a flurry of public finance proposals, including the largest proposed tariff hikes since World War II. However, improved clarity is on the way. NAHB Chief Economist Robert Dietz provides additional analysis.

Cost and Tariff Uncertainty Weighs on Markets2025-03-21T09:21:58-05:00
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