Home Appraisals Fall Short of Owner Expectations last 11 months of 2015; Spread tightens in December

Home values nationwide increased 3.8% from January to December 2015

Jan 13, 2016, 15:44 ET from Quicken Loans

DETROIT, Jan. 13, 2016 /PRNewswire/ -- Quicken Loans, the nation's second largest retail mortgage lender, today announced average appraised values in December were 1.8 percent lower than the homeowners' opinion of their home's value, according to the company's national Home Price Perception Index (HPPI). December is the 11th straight month when appraised values were lower than homeowners expected, although December marks the fourth month the gap between the two values have narrowed.

Quicken Loans' national Home Value Index (HVI) - the only measure of home values based solely on recent appraisals used in mortgage transactions - showed home values continuing to climb in December. Appraised values increased a modest 0.18 percent from November, but have risen a steady 5.81 percent since December 2014 and 3.8 percent since the beginning of the year.

Home Price Perception Index (HPPI)

Appraised values continued to fall below homeowner estimates in December. On average, appraiser opinions were 1.8 percent lower than the value homeowners expected, according to the national HPPI. Many of the metro areas studied also showed perception moving closer to equal. Appraisals remained higher in Western cities, while homeowner expectations topped appraised values in many of the Northeastern and Midwestern cities examined.

"The narrowing of the perceived vs. appraisal value gap is an excellent way to end the year," said Quicken Loans Chief Economist Bob Walters. "The more homeowners are in line with appraisers, and understand the equity in their home, the easier it will be to refinance their mortgage. In the same vein, if homebuyers understand how the local market is performing, they will be better equipped to come in with a strong offer on the home of their dreams."

Home Value Index (HVI)

Home values continued to rise in December, inching up 0.18 percent since November, while showing a healthy 5.81 percent increase since December 2014, according to the National HVI. There were small monthly variations in all of the regional areas examined, along with notable annual increases. The West remains the leader in annual home value growth, rising 8.61 percent since December 2014, while the Northeast trails all other regions with a 1.87 percent increase.

"2015 bookends with the same story we have heard throughout the year - a housing supply that trails the demand, continuing to push values higher," said Walters. "The market could benefit from homeowners taking advantage of the equity they are building, and make their home available to the many eager buyers. This could give buyers a chance to find the home they have been waiting for."


HVI

December 2015

 

January 2005 =
100

HVI

December 2015

vs.

November 2015

% Change

HVI

December 2015

vs.

December 2014

% Change

HPPI

December 2015

 

Appraiser Value
vs. Homeowner
Perception of
Value*

HPPI

December 2014

 

Appraiser Value
vs. Homeowner
Perception of
Value*

National Composite

95.93

+0.18%

+5.81%

-1.80%

+1.43%

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

Geographic

Regions

 

HVI

December 2015

 

January 2005 =
100

HVI

December 2015

vs.

November 2015

% Change

HVI

December 2015

vs.

December 2014

% Change

HPPI

December 2015

 

Appraiser Value
vs. Homeowner
Perception of
Value*

HPPI

December 2014

 

Appraiser Value
vs. Homeowner
Perception of
Value*

West

113.74

0.37%

8.61%

-1.42%

3.05%

South

97.14

-0.95%

4.00%

-1.76%

2.05%

Midwest

80.2

1.07%

3.83%

-1.99%

0.19%

Northeast

93.61

-0.38%

1.87%

-2.10%

-0.56%

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

Metropolitan

Areas

 

HPPI

December 2015

 

Appraiser Value
vs. Homeowner
Perception of
Value*

HPPI

November 2015

 

Appraiser Value
vs. Homeowner
Perception of
Value*

HPPI

December 2014

 

Appraiser Value
vs. Homeowner
Perception of
Value*

San Jose, CA

+4.99%

+5.15%

+6.45%

Denver, CO

+4.26%

+4.31%

+3.88%

San Francisco, CA

+3.94%

+4.16%

+4.45%

Dallas, TX

+2.43%

+2.52%

+4.34%

Houston, TX

+2.36%

+2.52%

+3.37%

Portland, OR

+2.09%

+2.22%

+3.56%

Boston, MA

+1.30%

+1.52%

+2.20%

Sacramento, CA

+1.15%

+1.21%

+3.09%

Los Angeles, CA

+0.74%

+0.71%

+3.25%

Riverside, CA

+0.69%

+0.82%

+0.81%

Las Vegas, NV

+0.35%

+0.23%

+2.25%

San Diego, CA

+0.33%

+0.08%

+0.46%

Washington, D.C.

+0.29%

+0.12%

+1.72%

Miami, FL

+0.10%

-0.16%

+1.46%

Seattle, WA

-0.45%

-0.14%

+3.04%

Minneapolis, MN

-0.64%

-0.66%

+1.72%

Tampa, FL

-0.84%

-0.56%

+0.53%

Atlanta, GA

-0.86%

-0.84%

+0.78%

Phoenix, AZ

-1.02%

-1.16%

+2.12%

Cleveland, OH

-1.72%

-1.72%

-0.89%

Kansas City, MO

-1.83%

-2.33%

-3.94%

Charlotte, NC

-2.04%

-2.16%

-1.67%

New York, NY

-2.07%

-1.83%

-0.95%

Detroit, MI

-2.43%

-2.19%

+2.45%

Chicago, IL

-2.85%

-2.79%

-0.14%

Baltimore, MD

-3.04%

-2.82%

+0.49%

Philadelphia, PA

-3.50%

-3.33%

-1.49%

*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 $200 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 named among the top-30 companies on FORTUNE magazine's annual "100 Best Companies to Work For" list for the last 12 consecutive years, ranking No. 12 in 2015. It has been recognized as one of Computerworld magazine's '100 Best Places to Work in IT' the past 11 years, ranking No. 1 in 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 13,000 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



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