New home sales remained at depressed levels in February, the National Association of Realtors reported Monday morning. That’s yet another disappointment to the Fed, which expected that lower mortgage rates would stimulate home buying. As the chart below makes clear, it hasn’t.

Property taxes are part of the explanation. Total US property tax collections have soared from $580 billion in 2004 to $740 billion at present, and most of the increase occurred while home prices were collapsing.  Think of it this way: if the whole $10 trillion universe of home mortgages were refinanced at the present 30-year mortgage rate of 3.8%, homeowners would pay $380 billion in annual interest and principal. In 2014, individuals paid $348 billion in property taxes. The property tax bill is now roughly as great as the mortgage bill.

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