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Rising Property Taxes and Insurance: A Growing Concern for Homeowners

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By Rick Tobin

Property tax and homeowners insurance payments have risen so much in many U.S. regions that the monthly property tax and homeowners payments can both be as high as an average mortgage payment. It’s truly a pity that the monthly PITI (Principal, Interest, Taxes, and Insurance) payments have reached unaffordable levels for so many homeowners across the nation.

An analysis by Lending Tree that was published and updated in May 2025 found the median property taxes across the nation rose by an average of 10.4% between 2021 and 2023.

Whether or not a homeowner owns their property with or without a mortgage, they must continue to pay at least their property tax payments or risk losing the residential or commercial property to a future foreclosure tax sale.

By comparison, the decision to hold a homeowners or landlord insurance property on a free and clear property is solely up to the property owner who is willing to take the risk associated with fires, floods, and other damaging events. Many landlords today with free-and-clear properties may also have negative cash flow, so they stop paying for insurance.

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Property Tax Trends

Let’s take a closer look at what was gathered, analyzed, and shared by both Lending Tree and the Tax Foundation as it relates to property tax and homeownership trends through 2023:

● U.S. homeowners paid a median property tax payment of $2,969 annually, or about $247 per month.

● Homeowners without a mortgage can select insurance policies with lower coverage limit amounts because they don’t have to also protect a mortgage lender on the same policy. As a result, the annual premium amounts are usually lower for homes with no mortgage debt.

● Homeowners without a mortgage for their free-and-clear properties paid a median of $2,474 in annual property taxes, while those with a mortgage paid almost $869 more per year at a median of $3,343.

● More than 40% of U.S. homes today are now owned without a mortgage. Some of these homeowners choose not to obtain any insurance for their properties to keep expenses low. In theory, this may make sense until a future firestorm or horrific flooding situation damages their property so severely that they must tear it down.

Low and High Property Tax Regions

Depending on the price paid and the tax assessment percentage rate for the subject property’s county region, annual property taxes paid can vary from $1,000 to $100,000+ per year.

Between 2021 and 2023, property taxes increased in each of the 50 largest metro regions. The three metropolitan regions with the lowest annual property tax payment increases were as follows:

1. Pittsburgh, PA: +4.4%
2. Philadelphia, PA: +8.2%
3. Milwaukee, WI: +8.3%

Conversely, the three metropolitan regions with the highest annual property tax increases were located here:

1. Tampa, FL: +23.3%
2. Indianapolis, IN: +19.8%
3. Dallas, TX: +19.0%

This same Lending Tree study found that among the 50 largest metropolitan areas, Birmingham, Alabama, had the lowest median annual property taxes at $1,091 per year. Memphis, Tennessee and Louisville, Kentucky had the second and third lowest annual property tax payments out of the 50 largest metro regions at $1,856 and $1,912, respectively. Amazingly, Birmingham’s annual property tax payments were 41.2% lower than the #2 lowest annual property tax region in Memphis.

Among the 10 metros with the highest annual property taxes, four are located in California and two are in Texas. Out of the large 50 metros, these three regions have the highest annual median property taxes:

1. New York, NY: $9,937
2. San Jose, CA: $9,554
3. San Francisco, CA: $8,156

Birmingham, Alabama and Phoenix, Arizona pay the smallest percentage of their home value in property taxes out of the 50 largest metropolitan regions at an effective tax rate of just 0.48%. Both Las Vegas and Denver pay slightly higher amounts at 0.50%.

Surprisingly, Buffalo, New York (2.11%), Chicago (2.08%), and Cleveland (1.74%) had the three highest effective tax percentage rates out of the top 50 metropolitan regions.

Property Taxes by County

Within each state, counties can assess different property tax percentage rates and special assessments that can increase or decrease the property taxes paid by each homeowner. Sometimes, counties or county equivalents can run out of cash and file for bankruptcy. If so, they may increase the property tax percentage rates owed to help cover their annual budgets for schools, roads, and other expenses.

Lowest Property Taxes

In 2023, the lowest annual property tax bills in the nation were found in 11 counties, or county equivalents (parishes, boroughs, etc.), with median property taxes of less than $250 per year, according to the Tax Foundation.

These counties, or county equivalents, had property tax amounts at $250 per year or less, as follows:

● Alabama: Lamar and Choctaw counties
● Alaska: Northwest Arctic Borough, the Kusilvak Census Area, and the Copper River Census Area
● Louisiana: Allen, Avoyelles, Madison, Tensas, and West Carroll parishes
● South Dakota: Oglala Lakota County

In many regions of Alaska, there are actually $0 property tax payments due each year. As such, these areas in Alaska would officially have the lowest property tax rates and payments in America.

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Highest Property Taxes

Now, let’s review the 16 counties with the highest median property tax payments in the nation that all have annual tax bills exceeding $10,000 per year:

● California: Marin County
● New Jersey: Bergen, Essex, Hunterdon, Monmouth, Morris, Passaic, Somerset, and Union counties
● New York: Nassau, New York, Putnam, Rockland, Suffolk, and Westchester counties
● Virginia: Falls Church City

Additionally, two counties in New Jersey (Hudson and Middlesex), three counties in California (San Francisco, San Mateo, and Santa Clara) and the Western Connecticut Planning Region in Connecticut have annual median property taxes above $9,000 and slightly below $10,000.

Reasons for Increasing Property Taxes

Property taxes are the primary tool for financing local governments. For example, property taxes comprised 27.4% of total state and local tax collections in the U.S., which was more than any other tax revenue source.

Property taxes collected are then used to fund schools, police departments, fire and emergency medical services, roads, and other services. As a percentage of local tax collections in regions like counties, property taxes accounted for more than 70% of local tax collections in fiscal year 2022.

Rapidly increasing salaries, underfunded pension needs, and overall county budget increases for county employees are also reasons why property taxes are going higher to cover these budget deficits.

Because home prices have reached all-time record highs in many U.S. regions, the corresponding property tax assessments have risen as well because they are based on the home purchase price or latest assessed value.

Skyrocketing Insurance Costs

Sadly, insurance costs are seemingly increasing at an even faster pace across the nation than property taxes and monthly mortgage payments.

It’s not uncommon these days for homeowners or landlords to pay $500, $1,000, $2,000, or $5,000+ per month (not year) to have sufficient insurance coverage that protects them and their mortgage lender.

As I’ve shared in past articles like The Drying Disaster-Relief Insurance Pools, a large number of insurance companies and government agencies that back insurers may be technically insolvent after several decades’ worth of costly and deadly firestorms, floods, hurricanes, tornadoes, and other natural or manmade events.

California’s own “insurer of last resort” named the FAIR Plan had upwards of $336 billion of property exposure a year ago with just a cash surplus between $300 and $700 million, as per the California Assembly Insurance Oversight Committee.

This FAIR Plan budget analysis took place well before the absolutely horrific firestorms that hit my former neighborhood of Pacific Palisades and Altadena near Pasadena, which I shared back in January 2025 one week after the firestorms hit these beautiful regions as I shared in my Steps to Recover from the Pacific Palisades Firestorm article.

There are 10 times more California homes in low-fire risk zip code regions than homes in high-fire risk regions that currently have much more expensive California FAIR (Fair Access to Insurance Requirements) Plan insurance, according to CBS News Los Angeles.

Fire Hazard Severity Zones (FHSZ) & Local Responsibility Areas (LRA)

On March 24, 2025, OSFM (Office of the State Fire Marshal) issued the 2025 Recommended Local Responsibility Area (LRA) FHSZ maps for California.

FHSZ Classification

Properties are designated as Moderate, High, or Very High Fire Hazard Severity Zones based on:
● Terrain and topography
● Vegetation and fuel conditions
● Fire history and frequency
● Climate and weather patterns

As a result of the issuance of this map, a large number of homeowners in California are losing their insurance and have no other option to choose from than the usually more expensive FAIR Plan.

Just recently, the California FAIR Plan proposed the raising of home insurance rates by an average of 35.8% starting next spring in 2026, according to this article by the San Francisco Chronicle. If this hike request is approved by the state, it would be the largest payment increase in at least seven years.

However, approximately half of California FAIR Plan customers might experience annual rate increases of 40% to 50%, while other customers could see their rates jump by more than 300%.

The Lock-In Effect

I’ve written about the lock-in effect over the years as it primarily relates to homeowners who didn’t want to sell or refinance their record low mortgage rates.

It’s not just homeowners who hold near record low 30-year fixed mortgage rates who are not motivated to sell their homes whether or not they can afford the monthly payments. Rather, a large number of homeowners today aren’t selling their homes because of factors such as fear of higher future property taxes if they acquire a more expensive home.

Many homeowners also don’t want to pay higher insurance and/or lose their low fixed rate mortgage that might be somewhere between 3% and 5%. Other homeowners are afraid to make any claims on their insurance policies even if completely justified because they don’t want to risk losing their insurance or seeing their annual premium payments double or triple.

As a result, the lock-in effect also applies to a combination of mortgage rate, insurance, and property tax swings that may be almost impossible for the average homeowner to afford if they decided to sell their home.

It’s somewhat akin to a deer-in-the-headlights type of frozen reaction for many homeowners where they don’t know what to do and the safest decision may be to sit tight and do nothing. Yet, the same holds true for potential buyers who are currently renting. Can they afford these rising mortgage, tax, and insurance payments?

At some point, home prices will be affected, for better or worse, when the number of sellers exceeds buyers or the number of buyers exceeds available home listings.

Rick Tobin

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details. 

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411.com or our Eventbrite landing page, CLICK HERE.

Asset Prices Surge Amidst Dollar Devaluation Trends

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By Rick Tobin

How are so many asset prices (homes, commercial real estate, gold, stocks, etc.) today at or near all-time record highs, while the purchasing power of the dollar is at all-time record lows? Is the economy booming like never before or is the dollar’s purchasing power seemingly crashing and burning?

A recently published Statista Consumer Insights survey that was conducted in June and July 2025 found that 49% of U.S. adult respondents said that the high cost of living was their biggest daily concern.

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The Top 8 answers provided in this survey of 4,098 adults between the ages of 18 and 64 were as follows:

1. Cost of living – 49.1%
2. Physical health – 26.3%
3. Mental health – 26.0%
4. Work-life balance – 25.8%
5. Political or social issues – 22.7%
6. Age-related concerns – 16.7%
7. Housing – 16.6%
8. Career dissatisfaction or uncertainty – 16.2%

Why does it seem that many items are less affordable today than in previous years? One answer is that our dollar’s purchasing power continues to rapidly decline at an accelerating pace.

Dollar’s Purchasing Power Turns to Ash

The federal government’s published inflation rates in 2025 are still lower than inflation rates back in the 2021/2022 years that peaked near 9%. However, it sure doesn’t seem like our dollar buys the same amount of goods and services here in 2025 whether or not the published inflation rates are 2%, 3%, 4%, 5%, 9%, or 10%.

Here’s a summary of the decline of the dollar over the past 112 years:

  • $1 in 1913 (the year when the Federal Reserve was formed, ironically, as a way to “contain inflation” and “stabilize the dollar”) now has the equivalent purchasing power of almost 3 cents today.
  • The purchasing power of $1 fell to about 7 cents over the past 50 years, so most of the dollar’s decline in value has taken place during this 50-year time period that followed the removal of the dollar from the gold standard during the 1971-1973 years.
  • Since 2000, the dollar’s purchasing power has dropped by -41%.
  • The M1 money supply (cash or cash equivalent) increased from $4 trillion dollars in January 2020 to $20 trillion dollars by October 2021. The more money in circulation, the less purchasing power for the dollar.
  • The dollar’s purchasing power has fallen 10% in the first seven months of 2025 as the dollar’s losses are accelerating.
  • Because real estate has proven to be an exceptional hedge against inflation and an imploding dollar or fiat currency that’s backed by “thin air,” these are key reasons why home values today are near all-time record highs.

Falling Rates & New Buying Opportunities

The average 30-year fixed rate over the past 50 years was about 7.7%, which is actually much higher than today’s 30-year fixed rate average that is almost 1.5% lower as of the first week in September 2025.

The peak high 30-year fixed rate over the past 50 years reached 18.63% in October 1981, while the low rate average fell to 2.65% in January 2021.

On September 5, 2025, the 30-year fixed rate reached a 6.29% rate average, as per Mortgage News Daily and CNBC. This rate was near the lowest 30-year fixed rate average dating back to October 2024.

Even if the Fed takes short term rates down to near zero again like in past years, the 10-year Treasury yield may still increase due to factors such as fewer foreign buyers for our Treasury bonds, rising federal debt, and potential future credit downgrades by credit rating agencies such as Moody’s, Standard & Poor’s, and Fitch.

To learn more details about potential interest rate directions, please read my article published on August 8, 2025: Are Lower Rates on the Horizon?

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Commercial Real Estate Trends

Each commercial asset class like multifamily, industrial, office, retail, and mixed-use across our nation has both positive and negative trends.

For some commercial properties owned by fortunate landlords, they may see 100% occupancy rates, record high rents, and all-time peak high property values. For other property owners, they may experience high vacancy rates, negative cash flow, and upside-side down values because their mortgage debt exceeds their current market value.

Let’s take a look below at some of the latest commercial real estate trends:

  • The estimated total dollar value of commercial real estate was $22.5 trillion as of Q4 2023, which makes it the fourth-largest asset class in the nation following stocks, residential real estate, and Treasury securities. (Federal Reserve’s April 2024 Financial Stability Report)
  • By July 2024, the national office vacancy rate reached a whopping 20.1%. This was the first time ever that the U.S. vacancy rate surpassed 20%. (CommercialEdge)
  • By early 2026, Moody’s forecasts office vacancy rates hitting 24%+.
  • In August 2025, the delinquency rate for office mortgages securitized into commercial mortgage-backed securities (CMBS) spiked to 11.7%, the worst ever default rate and a full percentage point above even the peak meltdown rate of the Financial Crisis (10.7%) during the 2008 to 2012 years, according to data by Trepp.
  • Almost 45% of all office buildings nationwide that are leveraged with debt are upside-down or underwater where the existing mortgage debt exceeds the current market value, per Bloomberg and Morgan Stanley.
  • To learn more details, please read my Are You Focused on Commercial Real Estate article.

Ballooning Commercial Loans & Motivated Sellers

Unlike most residential one-to-four unit properties that have 30-year fixed rate terms, most commercial properties have shorter term mortgages that may only last for a few years before they balloon or mature and must be paid off or refinanced.

Let’s review the ballooning commercial mortgage numbers below:

  • Approximately 20%, or $929 billion, of the $4.7 trillion dollars’ worth of outstanding commercial mortgages owed to lenders and investors were scheduled to balloon or become all due and payable by the end of 2024, as per the Mortgage Bankers Association’s 2023 Commercial Real Estate (CRE) Survey of Loan Maturity Volumes.
  • However, many of these ballooning loans were extended well beyond their maturity date because banks don’t want to acknowledge all of their current financial losses, just like back during the 2008 to 2012 era, or their bank’s stock value may go “pop.”
  • Upwards of $2.7 trillion for commercial and multifamily mortgages are set to balloon or mature by the end of 2026. (Mortgage Bankers Association)
  • In 2024, the U.S. apartment construction industry was expected to break a new all-time record for apartment units delivered with well over 500,000 units completed, which is 30% higher than back in 2022. (Fannie Mae)
  • When apartment unit supply exceeds tenant demand, rents and values tend to fall.
  • The rising multifamily apartment loan default rate is increasing due to a combination of rising adjustable rates that are resetting after 3, 5, or 7-years and skyrocketing insurance costs that creates negative cash flow.
  • The largest issuers for these ballooning commercial loans are community banks and thrifts that hold over half of these maturing loans through 2028.
  • Realloans offers interest-only and asset-based, no income verification commercial property loans with up to 30-year terms for most property types.

The Importance of Income-Producing Assets

Nearly 60% of Americans say they live paycheck to paycheck, according to surveys published by LendingClub.

Wealth distribution has become increasingly concentrated in the hands of fewer people since 1990. Overall, the top 10% of wealthiest Americans own more than the bottom 90% combined, with more than $95 trillion in wealth for the top 10%.

U.S. homeowners are 43 times wealthier than tenants. The average homeowner at retirement age has 83% of their net worth tied up in their main home.

The average age of a first-time homebuyer in the U.S. is 38, while it’s 49 here in California due to much higher prices, as per the National Association of Realtors.

The average U.S. home seller age in 2024 was 63. For many of these sellers, they first took a risky chance and bought their home more than 30 years earlier in their early 30s or late 20s.

The average homeowner at retirement age has 83% of their net worth tied up in their main home. Unless you’re in the Top 1%, the odds are quite high that the bulk of your wealth is concentrated in real estate if you’re fortunate enough to own now.

The average Social Security benefit here in 2025 is $1,976/mo. ($23,712/yr.), per Kiplinger.

The fastest growing demographic percentage increase in the workforce in 2024 was over the age of 75 because Social Security and pensions aren’t high enough, according to Pew Research.

Either you work hard for your money or you let your money or investments work hard for you when you’re awake or asleep. Yes, investing can be scary, but so can the thought of not having enough monthly income to cover your debts.

To be able to actually retire these days, many people need some form of income-producing assets creating monthly cash flow for them. It’s much riskier to do nothing today than to start investing as soon as possible.

The best time to start investing is now. Your future self and your family will later thank you.

Rick Tobin

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details. 

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411.com or our Eventbrite landing page, CLICK HERE.

Are Lower Rates on the Horizon?

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By Rick Tobin

Almost every housing boom and bust cycle over the past 100 years was directly related to access to third-party money sources. When rates are low and the loan approval process is more flexible, home values tend to be high. Conversely, higher rates and tighter loan approval processes usually make home prices stagnant or declining.

The average 30-year fixed rate over the past 50 years was about 7.7%, which is actually much higher than today’s 30-year fixed rate average that is about 1% lower as of the first week in August 2025.

The peak high 30-year fixed rate over the past 50 years reached 18.63% in October 1981, while the low rate average fell to 2.65% in January 2021.

On August 7, 2025, the 30-year fixed rate fell to a 6.63% rate average, as per Freddie Mac and the NAR. This was the lowest 30-year fixed rate average in about 10 months dating back to October 2024.

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The Fed’s Next Move

The next three scheduled two-day Federal Open Market Committee meetings held by the Federal Reserve in 2025, where interest rate directions will be discussed, will be on these dates:
● September 16-17
● October 28-29
● December 9-10

The FedWatch Tool, which is managed by the Chicago Mercantile Exchange (CME), now forecasts a 94.4% chance of a rate cut at the next Federal Reserve meeting to be held on September 16 and 17. This is partly due to a combination of weakening and revised past jobs reports, rising consumer debts and delinquencies, and increasing risks of future inflation trends.

On August 1, 2025, voting members like Federal Reserve Governor Lisa Cook shared that the recently revised jobs report from the Bureau of Labor Statistics (BLS) was a bit “concerning” to several Fed members. The BLS had provided a downward revision of its May and June payroll figures by a combined 258,000 jobs, which was the largest jobs reporting correction since 1968.

Back at the previous Fed meeting in July 2025, the Federal Open Market Committee (FOMC) decided to keep interest rates unchanged and within the 4.25% to 4.5% rate range. By early August 2025, the future near term probability of a rate cut skyrocketed to a 94.4% chance of at least a 0.25% rate cut and only a 5.6% chance of no rate cut at the next September meeting.

Some financial analysts believe that the Fed may be inspired to start cutting rates as much as 0.5% at a time and/or will continue cutting rates at the final three scheduled Fed meetings here in 2025 if the U.S. economy is seen as weakening more so than strengthening. This is partly due to the fact that the Fed is usually just as concerned about unemployment trends as they are about core inflation numbers.

Rising Home Inventory Numbers

Has there ever been a time when there is so much contradictory published data about real estate trends that can be viewed as both positive and negative at the exact same time as most metropolitan regions hit all-time record price highs?

There were 4,000,000 homes listed for sale as active inventory in 2007. Here in 2025, there are approximately 1,500,000 homes listed for sale. However, there are also 45 million more people across the nation today.

The vacant and distressed shadow inventory supply of U.S. homes absolutely dwarfs the national home listing inventory supply by a significant multitude. A recent study conducted by the Federal Reserve Bank of New York found that the average redefault rate over 12 months after a previous loan modification approval for a subprime mortgage-like mortgage was 56%.

Many homeowners have been able to keep modifying their delinquent mortgages for more than four years without making one payment. At some point, lenders and loan servicing companies will start filing foreclosure on a larger scale and the national home listing inventory supply will start to rapidly rise.

There were 500,000+ more U.S. home sellers than buyers in June 2025. How will these number trends look later this fall and winter?

The Declining Dollar

The US dollar has lost more than 28% of its purchasing power since 2020, as per the Truflation US Aggregate Inflation Index. Sadly, the purchasing power is declining at a faster pace now by falling somewhere between 10% and 11% through just the first seven months of 2025.

The M1 money supply (cash or cash-like instruments) went from $4 trillion in January 2020 to $20 trillion just 22 months later in October 2021. The more money in circulation, the less the purchasing power.

Upwards of nearly 1/3 of your savings has been severely damaged in half a decade between 2020 and 2025. Inflation is also akin to a hidden form of taxation.

The imploding value of the dollar over the past 50 years is a major factor why home prices have skyrocketed well above the annual published inflation rates. Historically, homes have been an exceptional hedge against inflation. Fifty years ago, $1 had the same purchasing power as 7 cents today here in 2025.

Real estate, however, is usually an exceptional hedge against inflation as homes have historically increased in value at least more than double the published inflation rates over the past 50 years.

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Interest Rate & Home Value Directions

Home values and interest rate trends are usually inverse to one another. When rates are low, home price directions are likely to rise. Conversely, rising rates can cause home values to fall. The 30-year fixed mortgage rates are tied directly to the 10-year Treasury yield, which is inverse to price and demand, while the Federal Funds Effective Rate impacts short-term consumer loans more. Many times, these different rates rise and fall together.

Even if the Fed pivots and starts aggressively slashing rates, a housing bottom tends to take somewhere between 24 and 48 months on average following a Federal Reserve rate cutting campaign such as the rate cuts after the 17 separate rate hikes between June 2004 and June 2006. From 2008 to 2015 when rates were near zero, it took upwards of seven years for some housing regions to rebound following the final June 2006 rate cut.

Record Home Equity and Locked-In Owners

U.S homeowners are now sitting on almost $35 trillion in net equity with or without existing mortgages in place. For homeowners who are locked in with sub-5% 30-year fixed mortgage rates, they may be hesitant to sell and lose these 5%, 4%, or 3% fixed rates.

For others (California homeowners, especially) who have built up equity far greater than the primary home sale capital gain exemption amounts ($250,000 for individuals and up to $500,000 for married couples filing jointly), they may be reluctant to sell and pay capital gains taxes on amounts over and above these maximum capital gains tax exclusion numbers.

In past housing downturns, the key factors that caused the price drops included:

* Rising home listing inventory (the distressed “shadow inventory” continues to be artificially suppressed and slowly released)

* Increasing unemployment numbers (the true unemployment rates are much higher than the published government data as I’ve said for decades)

* Rising foreclosures that later became neighboring home sales comps which, in turn, may drive down the non-distressed home values as well.

* Increasing “upside-down” or “underwater” homes where the mortgage debt exceeds the current market value. In California, it’s easier to walk away from a purchase money mortgage (the rules change, however, once you refinance your original California purchase loan) because the lender cannot pursue you for any financial losses and obtain a deficiency judgment like in other states like Texas.

* Unaffordable mortgage payments

What about long-term rate directions?

Please keep your eyes squarely focused on the next few Fed meeting decisions as well as the direction of the 10-year Treasury yield, which is a direct catalyst for the 30-year fixed mortgage rate directions.

Even if the Fed takes short term rates down to near zero again like in past years, the 10-year Treasury yield may still increase due to factors such as fewer foreign buyers for our Treasury bonds, rising federal debt, and future credit downgrades by credit rating agencies such as Moody’s, Standard & Poor’s, and Fitch.

The potential for any future credit rating downgrades for our federal debt may, in turn, drive bond prices downward and 10-year Treasury yields and corresponding 30-year fixed mortgage rates higher.

Money is needed to get you into and out of your real estate properties whether it originates from a mortgage broker, bank, equity fund, or your savings account. The more affordable the access to cash, the more likely that home values may rise rather than fall in either the short or long term.

We shall see what happens with future rate and home value trends. While there are no guarantees for real estate and life in general, the only constant in life, and also for rates, is change.

Rick Tobin

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details. 

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411.com or our Eventbrite landing page, CLICK HERE.

The Interplay of Medical, Insurance, and Housing Financial Burdens

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By Rick Tobin

For many American homeowners, the bulk of their net worth is created by the long-term equity creation in their primary home. Later in life, the home wealth may be used as a way to pay for medical expenses for the homeowners or other family members whether or not they have sufficient amounts of medical or life insurance benefits.

Here in 2025, the big three monthly expenses for a high percentage of Americans are medical, insurance, and housing costs for both owners and renters. Today, these big three costs are all at or near all-time record highs. As a result, this combination of so many unaffordable expenses are financially draining for more people and it’s incredibly challenging to set aside cash reserves.

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The #1 cause of financial insolvency and bankruptcy filings here in the U.S. is directly related to unpaid medical bills. Some past surveys found that upwards of 80% of those Americans who were forced to file for bankruptcy due primarily to medical bills did, in fact, have medical insurance coverage in place at the time.

Sadly, the medical insurance coverage wasn’t high enough to cover the medical bills and/or the cash payment deductibles required to pay these bills weren’t achievable for many cash-strapped medical patients or their families.

Debt, Divorce, and Home Listings

The #2 cause of financial insolvency for Americans is due to divorce which, in turn, is most likely associated with financial stress between the once loving married couple. Oftentimes, the unpaid medical bills for one or both spouses were the major financial strain that led to both significant money pressures and the subsequent divorce, tragically.

Here are marriage, family, and divorce trends that I’ve compiled and shared over the years in articles and books as it partly relates to the most important family word that’s located right in the middle of the “single-family home” description:

Marriage and Divorce Trends

* The overall divorce rate in Orange County, CA is 72%; it’s 60% in California; and 50%+ nationwide.
* 41% of first marriages end in divorce, 60% of second marriages end in divorce, and 73% of third marriages end in divorce.
* The average length of a marriage in the U.S. that ends in divorce is 8 years from start to finish.
* Couples who spent more than $20,000 on their wedding were 3.5 times more likely to divorce than those who spent between $5,000 and $10,000, as per Emory University.
* Unmarried parents who live together are more likely to break up than married parents, per the Brookings Institute.
* Since 1990, divorce rates for people over 50 have doubled; they’ve tripled for people over 65.
* The U.S. now has the highest percentage of single-person households in the world and lowest marriage rates ever.
* U.S. fertility rates are the lowest ever, as fewer babies are born.
* USA is #1 for highest teen pregnancy rate in the industrialized world.
* Approximately 50% of children are born to unmarried women under 30 here in the USA.

These ongoing declining marriage and family trends will likely negatively impact future single-family home trends at some point in the future.

The divorce then inspires the homeowners to sell their family home to pay off both the unpaid medical bills and the rising legal costs associated with the ongoing divorce and unpaid collections related to the medical bills.

There are more than 1.2 million spouses involved in a divorce nationwide each year, as per sources like the CDC. Roughly 61% of all divorcees involved in a divorce end up listing their primary family home which, in turn, works out to more than 732,000 home listings per year that are as a result of divorce, per sources like Smart Agents.

Because there’s an epidemic of skyrocketing unpaid medical bills, financial insolvency, and subsequent divorces, there’s an increasing number of real estate agents who focus on divorce listings for homeowners who really have very few options but to sell their beloved family homes to pay off their expenses.

Medical Debt, Insufficient Insurance & Bankruptcy

An estimated 100 million Americans owe more than $220 billion dollars in medical bills despite the passage of the Affordable Care Act (ACA) back in 2010.

Approximately two-thirds, or a rather devilish 66.6% of Americans, who file Chapter 7 (complete liquidation) or Chapter 13 (bankruptcy payment plan over a few years) bankruptcy do so primarily due to unpaid medical bills, according to sources like SmartFinancial. As per this same medical bill and bankruptcy analysis, it’s equivalent to 550,000 people each year who file for medical bill-related bankruptcy protection even though 80% of these same indebted consumers had health insurance coverage at the time of their bankruptcy filing.

There are many more U.S. consumers who have unpaid medical bills who don’t file for bankruptcy protection than those people who do file for bankruptcy by a factor of more than 30-to-1.

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For example, upwards of 14 million people, which is about 6% of American adults, owe more than $1,000 in unpaid medical bills. Additionally, another three million Americans owe more than $10,000 in medical bills. If true, this works out to 17 million Americans with unpaid medical debt as compared to 550,000 Americans who file for bankruptcy each year due partly to medical debt at a ratio of more than 30-to-1.

These unpaid medical bills can later end up as collection accounts with more aggressive debt collectors who may report the debt on a consumer’s credit report. If so, the declining credit scores for certain consumers can make it very challenging to qualify for various types of consumer loans such as for credit cards, automobile, business, and mortgage loans.

Homeowners who have too much wealth to file for bankruptcy protection from unpaid medical bills do have several ways to pull cash out of their home or investment properties as I’ve shared in past articles such as How to Leverage Real Estate to Reduce Medical Debt.

Is insurance the new “mortgage” payment?

An increasing number of Americans may pay more for medical insurance each month than they do for housing expenses as either a homeowner or tenant. For others, they may pay more each month for homeowners or landlord insurance premiums than they do for mortgage or rent payments, especially in certain high-risk insurance regions like Florida and California.

Past articles from sources like the New York Times have described health care insurance payments as the “new mortgage” for many homeowners who are now struggling to pay their medical bills, insurance, and housing costs in addition to other regular bills like groceries.

In this linked New York Times article entitled How the High Cost of Medical Care is Affecting Americans (December 18, 2024 publishing date), two shockingly high medical bill examples in that article were as follows:

* A bill of over $40,000 for the 20 minutes it took for a doctor to stitch a cut.
* An ambulance ride of just 200 feet cost $3,421.

Younger married couples may pay more for monthly child care than they do for their monthly housing costs. If so, these rising costs for parents who want one or more children may not be financially practical for them, sadly. This is one major reason why U.S. fertility rates are now at all-time record lows.

In many high-risk flood, storm, or fire regions, the monthly homeowners or landlord insurance premiums might’ve increased somewhere between 25% and up to as high as 1,000% in recent years. As a result, the monthly insurance premiums may be much higher than the mortgage payment as I’ve shared in recent articles such as The Drying Disaster-Relief Insurance Pools.

The Housing and Insurance Umbrella Protection

The greatest form of wealth is good health and happiness. We should all focus, first and foremost, on being as healthy as possible. Otherwise, the outrageously expensive medical bills and rising out-of-pocket deductible cash payment requirements can be financially devastating.

The insurance, real estate, mortgage, and medical sectors are all tied together in many ways with money being the root link between them. We all need sufficient amounts of insurance protection to protect us from any potential known or unknown future risks for both our properties and our bodies.

If someone doesn’t have enough insurance protection in place for medical expenses and/or housing, then he or she might end up penniless and in bankruptcy court.

Again, you’re more likely than not to create the vast majority of your overall net worth from the equity gained in the ownership of your primary home. However, you’re also likely to end up broke by future unpaid medical bills that may or may not be paid 100% by your insurance carrier if you’re fortunate enough to have any medical insurance at the time of the medical billing.

It’s generally very wise to reach out to your most trusted insurance, real estate, and mortgage advisors to assist you with the most creative, affordable, and safest combinations of financial planning that can keep you and your family protected like a sturdy umbrella in an approaching dark and destructive rainstorm.

Rick Tobin

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details. 

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411.com or our Eventbrite landing page, CLICK HERE.

Why Are Home Inventory and Prices Both Increasing?

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By Rick Tobin

California just reached an all-time record median home price peak of $910,160 in April 2025, as per the California Association of Realtors. This new record state price number was more than $500,000 above the national median home price in the same month. 

How much longer will home prices keep rising and home listing inventory numbers remain below historical norms, both here in California and across the nation?

In April 2025, the estimated days on market (DOM) statewide for California was listed as being as low as 31 median days on market by Redfin. The very low days on market listing number is a key factor why California home prices just surpassed all-time record highs.

By comparison, the median number of days a home spent on market in May 2025 as a listing in the U.S. reached 51 days, according to the Federal Reserve Bank of St. Louis. The median list price for U.S. home listings was $431,250 for May.

During the depths of the previous housing meltdown in California back in 2010, the median days on market was listed as 57.5 days as per the California Association of Realtors. However, the average days on market statewide for 2010 listings was listed by other sources as much longer at nearly 140 days, partly since it took several years for some listings to sell.

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California’s active home listing supply is lower today than back in 2019. Ten states are now back above pre-pandemic 2019 active housing inventory levels:         

Arizona
Colorado   
Florida 
Idaho
Hawaii
Oregon
Tennessee   
Texas
Utah
Washington

Source: ResiClub

The main exception to the low days on market rule for California home listing inventory is found in some higher price luxury home regions. For example: “San Diego County homes costing $6 million and up are taking an average 633 days to sell,” as per the San Diego Union Tribune.

All-Time Record High Listing Values

The U.S. housing market now has 500,000 more home sellers than homebuyers. What about the huge supply of distressed homes that have been in forbearance as far back as 2020? When will a larger percentage of this “shadow inventory” be added to the national home listing inventory?

After adding up another few trillion in commercial real estate listings, the combined listing values for all real estate property types do really reach all-time record highs.

There are now almost $700 billion dollars’ worth of home listings for sale in the United States, which is a new record since Redfin began tracking this data in 2012. This same study found that the total combined value of homes for sale is up +20.3% from last year.

The total number of growing listing inventory for homes for sale nationwide also had a year-over-year increase of +16.7% in April 2025, as per Redfin and NBC. However, home-sale prices still rose +1.4% over the period of 12 months by April 2025.

Please note that since home values in most metropolitan regions across the nation are likely to be at or near all-time record highs, this all-time combined record home listing number is not necessarily all negative. It just partly means that home values are much higher in 2025 than in years past.

Stale Listings and Canceled Purchase Contracts

The total “stale inventory” number (or 60+ days on the market) for U.S. home listings reached 44% of all home listings in April 2025. This was +42.1% higher than the previous year and the highest April percentage since 2020 following the pandemic declaration a few weeks prior.

There were approximately 56,000 home-purchase contracts that were canceled in April 2025 across the nation, which equals 14.3% (or 1-in-7 purchase deals) of all homes under contract for that same month.

Florida had five of the 10 metropolitan regions in the nation with the highest purchase contract cancellation rates in April 2025, as per Redfin and Newsweek.

The Top 10 Purchase Cancellation Rate Regions

1. Atlanta, GA: 20%+

2. Orlando, FL: 19.4%

3. Tampa, FL: 19.1%

4. Riverside, CA: 19.1%

5. Miami, FL: 18.9%

6. Ft. Lauderdale, FL: 18.9%

7. Ft. Worth, TX: 18.7%

8. Las Vegas, NV: 18.6%

9. Jacksonville, FL: 18.4%

10. San Antonio, TX: 18.2%

All four of the states (Florida, Georgia, California, and Texas) included in this Top 10 cancellation rate percentage list have challenging homeowners insurance issues related to both availability and rising costs.

Other factors for home purchase cancellations include rising mortgage costs and loan denial rates. A larger number of mortgage applicants these days are having to switch from conventional mortgages to non-QM or private money to qualify to purchase homes because their credit scores may be dropping and/or their debt-to-income (DTI) ratios are rising too high and exceeding 40% or 50% DTI ratios.

Real Inflation is Much Higher

Why does “real world” inflation seem significantly higher than published government inflation rates? Are your asset investments booming and/or is the purchasing power of your dollar busting?

How often do you go to a fast food restaurant and spend more than $20 per person? Can you fill up less than half of your grocery cart for less than $200 where you shop?

Between 2000 and 2025, let’s take a closer look at some of my price increase percentage estimates for homes, education, and automobiles:

* Home prices: Up 3 to 5 times in many markets.
* College tuition: Up 2 to 4 times at many schools.
* Car prices: Up 2 to 3 times for numerous car models.

When I see the federal government’s published annual inflation data that’s closer to 2% to 4%, I wonder where these economists shop. Am I shopping at the wrong stores and paying prices that seem to be more than 10% higher than last year or is the published government data not all that accurate?

Record Consumer and Government Debt

More than 12% of outstanding credit card balances are 90 days delinquent, which is the highest percentage since 2011. Delinquent student loans (in red) are rapidly rising to almost 8% as well as of the first quarter of 2025.

The Federal Reserve conducted a survey recently and asked a large pool of U.S. consumers if they had $2,000 in cash savings to cover an unexpected emergency expense using only their savings and not any credit cards.

The Fed’s survey results were as follows:

  • 52% of U.S. consumer respondents could not cover a $2,000 emergency expense using only their cash savings.
  • 31% of surveyed consumers could not cover a $500 cash expense.
  • A record 37% of respondents described inflation as their #1 primary financial challenge.

In the first quarter of 2025, the federal debt was increasing in size by about $1 trillion every 100 days.The U.S. dollar has now lost almost 9% of its value this year, according to Barchart.

In 2024, world governments issued more debt than ever before. For example, sovereign bond issuance across the planet reached a record $18 trillion dollars in 2024, as per the Kobeissi Letter. Approximately $16 trillion was issued by developed countries like the United States, and $2 trillion by emerging market economies.

The total world government bond issuance has nearly doubled since 2019. Over the past five years, governments have issued more debt worldwide than in the eight years before the 2020 pandemic declaration.

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Wealth Creation, Leverage, and Home Appreciation

U.S. homeowners have an average net worth of $430,000 (it’s significantly higher or more than double in California for many), while renters average just $10,000.

The power of leverage for home purchases can increase the annual cash-on-cash return from 5% to 50%+, depending on the down payment invested.

It’s not just your down payment or cash equity that is appreciating each year like with stocks. Rather, it’s the total overall home value that may be leveraged anywhere between 80% and 100% LTV (loan-to-value) with a purchase mortgage.

The average retired homeowner has more than 80% of their entire net worth tied up in the equity in their primary home where they live.

If mortgage rates suddenly fall soon, will buyer demand rapidly increase to help offset the rising supply numbers? Conversely, will rising rates scare off many future buyers who may be struggling to qualify for these high home prices?

It’s more likely than not that both consumer and government debt will continue to increase in the near future. If so, our dollar may continue to weaken and inflation will keep steadily making prices less affordable for goods and services.

If you rent, inflation is not so fun as your annual rents paid may consistently increase. However, homeowners and landlords usually enjoy the power of leverage and appreciation as their overall net worth continues to grow over time.

Two exceptional hedges against inflation have proven to be real estate and gold. The main difference between these two investment choices is that you can live in homes where you can store your gold bars too.

Rick Tobin

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details. 

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411.com or our Eventbrite landing page, CLICK HERE.