Quicken Loans Study Shows Appraised Values Slightly Lower Than Homeowner Expectations

Home Price Perception Index (HPPI)

Owners are still estimating their homes at higher values than the appraisal, although the spread is now slightly narrower. Nationally, appraisals were an average of 1.70 percent lower than what homeowners thought they would be, as measured by the HPPI. This is compared to June when estimates were 1.93 percent higher. There is a wide range of perceptions across the country. The Midwestern and Eastern regions kept with the national trend of a lower appraiser opinion. On the flip side, the Western markets were more likely to have owners underestimate their home value. 

"While a 1 or 2 percent difference in home value opinions may not seem like a lot, it could be enough to derail a mortgage," said Quicken Loans Executive Vice President of Capital Markets, Bill Banfield. "A homeowner could be forced to bring more cash to closing in order to make a mortgage work if the appraisal is lower than expected. On the other hand, if an appraisal comes in higher, they could be surprised with more equity than they had planned. Either way, if owners are aware of their local markets it will lead to smoother mortgage transactions."

Home Value Index (HVI)

June was another month of strong home value growth. According to the National HVI, appraised values rose 1.25 percent from May. Annual growth was even stronger with 5.35 percent year-over-year increases in value. The only region that didn't show a monthly increase in appraisal values was the Northeast, with a 1.18 percent drop. However, all regions showed annual gains, ranging from 2.17 percent in the Northeast to a 6.12 percent increase in the West.

"As we get later into the spring and summer selling season there are less and less homes available for sale, driving prices higher," Banfield said. "What's clear is that the demand for housing is strong in much of the country. With interest rates remaining historically low, this could be the time for a homeowner to move on to the new construction home they had their eye on. If they do so, it would open home options for first time home buyers entering the market. The additional inventory could lead to more balanced prices, moving away from the spike in annual growth we have seen lately."

*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 $300 billion of mortgage volume across all 50 states between 2013 and 2016. Quicken Loans moved its headquarters to downtown Detroit in 2010, and now more than 17,000 team members from Quicken Loans and its Family of Companies work in the city's urban core. The company 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 seven consecutive years, 2010 – 2016, and highest in customer satisfaction among all mortgage servicers the past three years, 2014 – 2016.

Quicken Loans was ranked #10 on FORTUNE magazine's annual "100 Best Companies to Work For" list in 2017, and has been among the top-30 companies for the past 14 consecutive years. The company has been recognized as one of Computerworld magazine's '100 Best Places to Work in IT' the past 13 years, ranking #1 for eight of the past twelve years including 2017. The company is a wholly-owned subsidiary of Rock Holdings, Inc., the parent company of several FinTech and related businesses. Quicken Loans is also the flagship business of Dan Gilbert's Family of Companies comprising nearly 100 affiliated businesses spanning multiple industries. For more information and company news visit QuickenLoans.com/press-room.

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SOURCE Quicken Loans