American homebuyers battling elevated interest rates and high listing prices are confronting a far broader financial hurdle: a hidden "obstacle course" of property taxes, rising insurance premiums and local regulatory friction.

Beyond headline mortgage rates, rising monthly carrying costs in high-growth states are increasingly influencing where families can afford to settle, according to SERHANT. founder and real estate star Ryan Serhant.

"New York taught me that real estate is a function of price and rates. It is supply, and it is demand," Serhant told Fox News Digital at his SoHo headquarters. "As we started expanding the company across the country in 2023, what we learned very, very quickly is that price and rates are only a small piece of what I would call, not even a housing market, but a housing obstacle course."

"You realize that the game has somewhat been rigged by those who created the obstacle course in the first place, and punishes mobility in favor [of] stability."

HOME SELLERS MAY HAVE TO ‘TAKE A HIT’ AS RATES RISE, REAL ESTATE EXPERTS SAY

As of Thursday, the average rate on a 30-year fixed refinance was 7.11%, up from 7.07% a week earlier, while the average 15-year fixed refinance rate was 6.34%, according to the Mortgage Research Center. The increase comes after the Federal Reserve last week raised the target range for the federal funds rate from 3.5%-3.75% to 3.75%-4%. The 25-basis-point increase marked the first interest rate hike since July 2023 and came after the Fed left rates unchanged at its first five meetings this year.

Additionally, a new report from Redfin shows that U.S. home prices rose 3.7% year over year in August, representing the fastest annual growth rate in a year.

While cost pressures may entice some homeowners to move to states without individual income taxes, such as Florida and Texas, Serhant warned that unexpected carrying costs can offset initial tax savings.

"People move with two things, and it's not just their two legs, which politicians like to say, ‘People vote with their feet.’ They move with their wallet, and they move with heart," he said.

"If you think about a state like Florida, for example… And if you think about Texas, people think about no state income tax, but then they start to realize, ‘Oh, how are real estate property taxes determined?’ In Florida, it's almost 2% of what you pay. That's a lot. And then you start thinking about sales taxes, what insurance costs — what is it like to get homeowners insurance in a coastal city these days? What does it actually cost you per month if you have to get private homeowners insurance?" Serhant posited. "God forbid there's a hurricane, let alone a tornado, let alone an earthquake, let alone a forest fire."

Turning to local policy, Serhant also discussed measures such as New York City's new non-primary-residence surcharge, called a pied-à-terre tax, which he argued can trigger broader market gridlock. He said that rather than forcing high-net-worth sellers to cut prices, such tax assessments can freeze activity among middle-tier buyers.

"The conversation where people are moving to is a full package conversation. The pied-à-terre tax hasn't pushed people out of the city. What it's done is, it's frozen people who are in the middle, where that payment does really affect their monthly living costs, their monthly budget. If they had a place in New York City as a pied-à-terre, so they could have a nice one-bedroom or two-bedroom in a nice building close to their daughter who now lives in New York, and they want to go to Broadway a couple of times a year, so now, okay, well maybe [they] don't do that trip anymore… and we have those conversations."

"Governments need to take a long-term view. Their constituents do not," Serhant continued. "If I am a dad and I have a kid, I'm thinking, yes, about how I'm gonna raise them over the next 20 years, let's say, but I'm also really thinking about what I'm going to do with them on Saturday, and my commute to work tomorrow. Government needs to be thinking 10, 20 years down the line: How do I create the greatest place for people to grow up? How do we create the greatest place for us to create opportunities? And I think New York, I think Seattle, I think a lot of parts of California are taking a short-term view on state growth. And I think it's frustrating."

Serhant argued, however, that home purchase decisions are influenced by job creation, school quality, public safety and infrastructure reliability, pointing to growth in markets such as Charlotte, North Carolina.

"I think the fastest-growing city of the last year, and one of the first markets that we expanded into three years ago, is Charlotte, North Carolina. The Carolinas, I feel, are oftentimes overlooked in the news because they don't get the clicks. And a lot of the news is written by people who live on the East Coast or the West Coast in the major cities," he noted.

"And so they forget about what really drives the country, which is incredible job growth, great access to education and security, you know. Policy tends to affect everything else and get the headlines, but people move heavily for those three things."

In an economy where capital and employment are geographically flexible, Serhant notes that real estate remains fundamentally hyperlocal and, ultimately, states and cities that create administrative friction risk losing investment to competing regions equipped for modern growth.

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"You buy based on the street corner, you buy based on that restaurant, that school, so on and so forth. And so investors and people who have the ability to move are now thinking about stretched markets. They don't necessarily need to come to your city for a job. They don't necessarily need to go to that state for grade schooling. They don't necessarily need to go to that market and pay higher property or income taxes. They can be almost anywhere," he said.

"The economy is global and it moves in milliseconds… And we are doing our small, small part in trying to reduce the friction in what is the largest asset class on earth, which is property, to kind of bring the country back to where it needs to be."

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