Taxes and Insurance Now Make Up a Bigger Share of Mortgage Payments: What Homebuyers Need to Know in NJ, PA, and FL

Housing Affordability Isn’t Just About Price and Rates Anymore

When most people talk about housing affordability, the focus is usually on two things: home prices and mortgage rates. And for good reason—both have a major impact on your monthly payment.

Home prices have risen significantly over the past few years, and mortgage rates have fluctuated enough that buyers feel the difference immediately. But there’s a third factor that’s becoming just as important—and many buyers underestimate it:

Property taxes and homeowners insurance.

Today, these two costs combined are taking up a growing share of monthly mortgage payments—and in many cases, they’re the reason buyers feel “priced out,” even when they qualify.

Property Taxes and Insurance Now Exceed 20% of Monthly Payments

Recent housing data shows that property taxes and homeowners insurance now account for over 20% of the average monthly mortgage payment nationwide.

That’s a major shift.

Traditionally, these costs were a smaller portion of the total payment. But today, they can add hundreds—or even thousands—of dollars per month, depending on the location and property type.

Why Taxes and Insurance Are Rising

1. Higher Home Values = Higher Property Taxes

As home values increase, so do assessed values in many areas. That means higher annual property taxes, especially in states like New Jersey where taxes are already among the highest in the country.

2. Insurance Costs Are Climbing

Homeowners insurance premiums are rising due to:

• Increased rebuilding costs (labor + materials)

• More frequent severe weather events

• Higher claim payouts nationwide

States like Florida are seeing especially sharp increases, but even in NJ and PA, premiums are noticeably higher than just a few years ago.

Local Impact: NJ, PA, and FL Buyers

New Jersey (NJ)

New Jersey consistently ranks among the highest in the U.S. for property taxes. For many buyers, taxes alone can add $800–$1,500+ per month depending on the home and town.

Pennsylvania (PA)

PA offers more variability. Some counties are affordable, while others—especially suburban areas—have rising tax burdens that can significantly impact affordability.

Florida (FL)

Florida benefits from no state income tax, but insurance costs have surged, especially in coastal and storm-prone areas. This can dramatically increase monthly payments.

Why This Matters for Buyers Right Now

Many buyers focus only on:

• Purchase price

• Interest rate

But the true monthly payment (PITI: Principal, Interest, Taxes, Insurance) is what determines affordability.

A home that looks affordable on paper can quickly become uncomfortable once taxes and insurance are factored in.

On the flip side, a knowledgeable strategy can help you:

• Choose locations with lower tax burdens

• Structure your loan to offset higher costs

• Compare total monthly payments—not just price

Smart Strategies to Offset Higher Costs

Here’s how buyers can stay ahead of rising taxes and insurance:

• Shop multiple insurance quotes before closing

• Work with a loan officer who calculates full PITI upfront

• Consider nearby towns with lower tax rates

• Explore loan programs that reduce upfront or monthly costs

• Look at total payment—not just home price—when comparing options

The Bottom Line

Housing affordability has changed.

It’s no longer just about home prices and mortgage rates—property taxes and homeowners insurance are now major drivers of your monthly payment.

If you’re buying in New Jersey, Pennsylvania, or Florida, understanding these costs upfront can be the difference between stretching your budget and making a confident, informed decision.

Get a True Payment Breakdown Before You Buy

If you’re thinking about buying or refinancing, I’ll break down your full monthly payment—including taxes and insurance—so there are no surprises.

Visit NewHomeApproval.com or reach out directly to get started.