Quicken Loans: Owner Perceptions of Home Values Improve After Six Months of Declines

DETROIT, June 11, 2019 /PRNewswire/ -- The average home appraisal in May was 0.79% lower than what the owner estimated, according to the Quicken Loans Home Price Perceptions Index (HPPI). While a lower than expected appraisal is never welcome news, this difference between homeowner estimates and appraisal values is slightly smaller in April, and the first improvement following six months of growing gaps between the two data points.

Homeowners across the country should not be shocked when their home is appraised. Just as the national average shows a small difference between what owners and appraisers think, none of the metro areas studied had appraised values 2% lower than what owners were expecting. In May, Philadelphia trailed all other cities, with the average appraisal 1.74% lower than what the owner estimated. There is also a new leader among those with a positive HPPI value with Charlotte boasted an average appraisal value 1.99% higher than expected.

"An appraisal can cause a variety of emotions from curiosity of the value, to frustration if it comes in too low and even surprise if the appraised value shows more equity than the homeowner realized, said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. "Luckily there wasn't a lot of frustrated homeowners in May since the HPPI values across the country are in a relatively tight band, showing that appraisals are not likely to cause much of a disruption in the mortgage process. This is, however, a reminder to homeowners that they should always keep an eye on the home sales around them to get a realistic gauge of their home value before estimating what it could be."

Quicken Loans' Home Value Index (HVI) shows that appraisal values reversed course from April's large increase. The nation's average home appraisal was 1.10% lower than in April, nearly erasing last month's growth. The annual measure, on the other hand, continued its positive momentum, with home values rising 3.54% year-over-year at a national level.

The bulk of the national drop in appraisal values came from the West, where home values were 1.74% lower in May than in April. The Midwest, with a month-over-month increase of 0.47%, is the only region with home value growth. All regions continued annual appraisal value increase – ranging from a meager 0.07% bump in the Northeast, to a 4.68% year-over-year jump in the Midwest.

"Winter's long hibernation is definitely over for Midwest homebuyers. They're hitting the streets and competing for a persistently low home inventory which is leading to appraisal value spikes," Banfield said. "The annual increase is a very positive sign, showing the growth is more than just seasonality."

*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 largest home mortgage lender. The company closed nearly half a trillion dollars of mortgage volume across all 50 states from 2013 through 2018. Quicken Loans moved its headquarters to downtown Detroit in 2010. Today, Quicken Loans and its Family of Companies employ more than 17,000 full-time team members in Detroit's urban core. The company generates loan production from web centers located in Detroit, Cleveland and Phoenix. Quicken Loans 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 the country for customer satisfaction for primary mortgage origination by J.D. Power for the past nine consecutive years, 2010 – 2018, and also ranked highest in the country for customer satisfaction among all mortgage servicers the past five consecutive years, 2014 – 2018.

Quicken Loans was once again named to FORTUNE magazine's "100 Best Companies to Work For" list in 2019 and has been included in the magazine's top 1/3rd of companies named to the list for the past 16 consecutive years. In addition, Essence Magazine named Quicken Loans "#1 Place to Work in the Country for African Americans."

For more information and company news visit QuickenLoans.com/press-room.

SOURCE Quicken Loans

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