Gap Between Appraisals and Perceived Home Value Narrows in September

Nationally, home values made a slight dip in September, as measured by Quicken Loans' Home Value Index (HVI). Average appraisals fell 0.25 percent from August, but increased a robust 7.78 percent since September 2015. 

Home Price Perception Index (HPPI)

Quicken Loans' HPPI, the only comparison of home value perception differences between homeowners and appraisers, showed while homeowners are still a bit more optimistic, the two are moving closer to agreement. In September the national HPPI reported homeowner expectations were an average of 1.26 percent below actual appraised values.

The national HPPI average does not reflect the reality in all areas of the country. For instance, the fast growing markets of Denver, San Francisco and San Jose had appraised values higher than what homeowners estimated. On the flipside, in Philadelphia, Baltimore and Chicago, appraisals were lower than what homeowners believed they would be.  

"When reading about the health of the economy, many consumers don't take into account how varied housing markets can be," said Quicken Loans Chief Economist Bob Walters. "If a homeowner in Philadelphia hears about the housing boom out west, they could be surprised when their home doesn't sell at the price they thought it would. I encourage homeowners to work with real estate agents, lenders and other experts to determine their home's value."

Home Value Index (HVI)

Home values continued a steady march up, despite a slight dip in September. The average appraisal was 0.28 percent lower in September than August, but 7.78 percent higher year-over-year. The drop in home values comes after four straight months of increases. At a regional level, the West and South made small gains with a 0.31 percent growth each. However, appraised values fell in both the Midwest and Northeast with decreases of 2.23 and 1.42 percent respectively. Despite the monthly variations, all regions reported increasing annual growth in home values ranging from 5.52 percent growth in the Northeast to an 8 percent rise in the West.  

"This small decrease in home values is not a signal of a turning tide, it just shows the volatility that can come with changing seasons," said Walters. "As the summer came to a close, the intense competition for available homes began to abate and home values dipped as a result. It's important to focus on the annual picture. The strong yearly growth negates monthly changes and shows we are moving in the right direction."

*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

About the HPPI & HVI

The Quicken Loans HPPI represents the difference between appraisers' and homeowners' opinions of home values. The index compares the estimate that the homeowner supplies on a refinance mortgage application to the appraisal that is performed later in the mortgage process. This is an unprecedented report that gives a never-before-seen analysis of how homeowners are viewing the housing market. The HPPI national composite is determined by analyzing appraisal and homeowner estimates throughout the entire country, including data points from both inside and outside the metro areas specifically called out in the above report.

The Quicken Loans HVI is the only view of home value trends based solely on appraisal data from home purchases and mortgage refinances. This produces a wide data set and is focused on appraisals, one of the most important pieces of information to the mortgage process.

The HPPI and HVI are released on the second Tuesday of every month. Both of the reports are created with Quicken Loans' propriety mortgage data from the 50-state lenders' mortgage activity across all 3,000+ counties. The indexes are examined nationally, in four geographic regions and the HPPI is reported for 27 major metropolitan areas. All indexes, along with downloadable tables and graphs can be found at QuickenLoans.com/Indexes.

About Quicken Loans

Detroit-based Quicken Loans Inc. is the nation's second largest retail home mortgage lender. The company closed more than $220 billion of mortgage volume across all 50 states, 2013-2015. Quicken Loans generates loan production from web centers located in Detroit, Cleveland and Scottsdale, Arizona. The company also operates a centralized loan processing facility in Detroit, as well as its San Diego-based One Reverse Mortgage unit. Quicken Loans ranked "Highest in Customer Satisfaction for Primary Mortgage Origination" in the United States by J.D. Power for the past six consecutive years, 2010 – 2015, and highest in customer satisfaction among all mortgage servicers the past three years, 2014 – 2016.

Quicken Loans was ranked No. 5 on FORTUNE magazine's annual "100 Best Companies to Work For" list in 2016, and has been among the top-30 companies for the last 13 years. It has been recognized as one of Computerworld magazine's '100 Best Places to Work in IT' the past 12 years, ranking No. 1 in 2016, 2015, 2014, 2013, 2007, 2006 and 2005. The company moved its headquarters to downtown Detroit in 2010, and now more than 10,000 of its 15,000 team members work in the city's urban core. For more information about Quicken Loans, please visit QuickenLoans.com, on Twitter at @QLnews, and on Facebook at Facebook.com/QuickenLoans.

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SOURCE Quicken Loans

Related Links

http://QuickenLoans.com/Indexes