Quicken Loans Study Reveals Owners in Western Cities Underestimate the Value Appraisers Put on Their Homes

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Appraised values continued to climb in May. Quicken Loans' National Home Value Index (HVI) reported values rising an average of 0.79 percent since April, but posting a robust 4.36 percent increase since May 2015. All four regions examined told a similar story – modest monthly growth and substantial annual increases.

Home Price Perception Index (HPPI)

On average, American homeowners' expectation of their home's value were 1.89 percent higher than the actual appraised value in May. However, it is a very different story in Western cities. Denver had the highest HPPI value in May, with appraisals showing home values an average of 3.28 percent higher than what homeowners thought. Across most of the Eastern and Midwestern cities examined, the owner's estimate outpaced the value appraisers assigned to the property as evidenced by data from Philadelphia, Detroit and Baltimore – each of whose appraisals were more than 3 percent lower than what homeowners expected.

"The hot housing markets along the west coast are growing quicker than owners realize, giving way to higher than expected prices for buyers and more home equity for existing owners," said Quicken Loans Chief Economist Bob Walters. "On the other hand, the housing markets are more balanced in the East and Midwest, leading owners to be slightly over enthusiastic about their home's appreciation."

Home Value Index (HVI)

The Quicken Loans Home Value Index (HVI), which examines home value changes based solely on appraisals, showed May was yet another positive growth month. Nationally, appraised values increased a tepid 0.79 percent since April, but grew a healthy 4.36 year-over-year. Home values rose in all four geographic regions measured. The West led with 6.21 percent annual growth. The Northeast had slower, albeit healthy, gains in appraisal values with a 2.03 percent increase in the past year.

"Demand for housing coupled with a lack of choice for buyers pushed home values up yet again," said Walters. "This is a narrative we have heard for quite some time. Many owners aren't moving on from their current homes, which is holding back available inventory for both first time and move up buyers. With values on the rise, this could prove to be an ideal time to sell – especially in the hot markets where owners could get more than they expected."

*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 since 2013. 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 in 2014 and 2015.

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.

SOURCE Quicken Loans