Quicken Loans' Measure of Home Value Perception Shows Appraisals Lagging Behind Owner Estimates

DETROIT, March 14, 2017 /PRNewswire/ -- Homeowners and appraisers are still not seeing eye-to-eye. Home appraisals were an average of 1.69 percent lower than what homeowners expected in February, according to the National Home Price Perception Index (HPPI). The current trend of appraisals falling lower than homeowner estimates started in February 2015, and the gap between the two values has now widened for the third consecutive month.

Home appraisals rose in value by an average of 0.55 percent in February, as measured by the National Home Value Index (HVI). Additionally, appraisal values increased 2.95 percent year-over-year. The index rose in all regions measured.  

Home Price Perception Index (HPPI)

Appraisal values continue to fall below homeowner estimates nationally, and in just less than half of the 27 metro areas examined. The National HPPI shows homeowners' estimated values were an average of 1.69 percent higher than appraisers' home value opinions in February. While this national average continues to show lower values than homeowner estimates, there are still metro areas showing appraiser opinions that are higher than what homeowners expected. Many of these are western cities with rapid home appreciation, including Denver, Portland, Seattle, San Francisco and Los Angeles.   

"Quicken Loans is in a unique position, with access to two valuable data points. Homeowners tell us what they think their home is worth at the beginning of the mortgage process, then we compare that with the appraiser's opinion of value," said Quicken Loans Vice President of Capital Markets, Bill Banfield. "We hope consumers will take advantage of this information, seeing how their neighbors are perceiving their housing market, so they can better understand their own home's value."  

Home Value Index (HVI)

The National HVI showed the country's appraisal values rose an average of 0.55 percent from January to February. In addition to this modest increase, home values reached a level 2.95 percent higher than February 2016. This trend was reflected in regional values, with the West leading the way by posting a 4.45 percent year-over-year increase. The Midwest again trailed the rest of the country with an annual increase of just 0.47 percent.

"Low levels of home inventory persists as the main driver of home value growth," said Banfield. "There are still plenty of interested buyers vying for a slim amount of homes for sale – pushing prices higher. Home values are likely to move higher in the Midwest as the spring buying season approaches, unless the number of homes available increases."

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 has closed over $300 billion of mortgage volume across all 50 states between 2013 and 2016. 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 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 last 14 years. It has been recognized as one of Computerworld magazine's '100 Best Places to Work in IT' the past 12 years, ranking #1 for seven of the past eleven years including 2016. The company moved its headquarters to downtown Detroit in 2010, and now more than 12,000 of its 16,000 team members work in the city's urban core. For more information about Quicken Loans, please visit QuickenLoans.com.

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