Quicken Loans HPPI: Homeowner expectation of value nearing appraiser valuation

- Nationally, appraised values were an average of 1.75% lower than homeowner expectations.

- Gap between appraisal and owner estimates narrow for the fifth consecutive month.

- Home values fell 0.42% in January, rose 3.37% from year prior, according to national HVI.

Feb 09, 2016, 10:00 ET from Quicken Loans

DETROIT, Feb. 9, 2016 /PRNewswire/ -- Quicken Loans, the nation's second largest retail mortgage lender, today announced average home appraisal values in January were 1.75 percent lower than what homeowners were anticipating, according to the company's Home Price Perception Index (HPPI). This continues the trend of nearing equilibrium between expectations and actual appraisal values.

While the HPPI is narrowing, home values experienced a small pullback in January. According to Quicken Loans' National Home Value Index (HVI), values decreased 0.42 percent since December, although year-over-year growth continued with an increase of 3.37 percent. 

Home Price Perception Index (HPPI)

Homeowners across America are understanding their home's worth more as the gap between homeowner estimates and appraiser opinions narrows. The national HPPI showed the average appraisal was 1.75 percent lower than what homeowners expected. While January was the fifth month the National HPPI moved closer to equilibrium, the homeowners and appraisers in many metro areas still do not see eye-to-eye. This is particularly true in the west where homeowners are continuing to underestimate the value of their home as they struggle to keep up with rising home values.   

"It's always important to understand your local real estate market," said Quicken Loans Chief Economist Bob Walters. "If home values are growing in the area, homes may be gaining equity faster than consumers realize. On the other hand, if the local market is struggling, the appraisers – who are most aware of home value changes – may recognize this before homeowners come to terms with reality."

Home Value Index (HVI)

Quicken Loans' HVI, the only measure of home values based solely on appraisals, showed home values experience a slight dip in January. Home valuations decreased 0.42 percent since December, according to the national HVI, although appraised values rose 3.37 percent since January 2015. Regionally, the western and southern areas continued modest annual gains, while the Northeast and Midwest showed small declines in both monthly and yearly measures. 

"Home valuations continue to rise as the economy strengthens and buyers find homeownership often cheaper than renting," Walters explained. "The number of potential homebuyers outpaced sellers in some markets. On the other hand, some areas are more balanced, producing slower grow or even a slight decline in some months. It is important to remember that tepid growth is not a cause for concern, but rather a sign of a healthy and sustainable market."


HVI

January 2016

 

January 2005 =

100

HVI

January 2016

vs.

December 2015

% Change

HVI

January 2016

vs.

January 2015

% Change

HPPI

January 2016

 

Appraiser Value

vs. Homeowner

Perception of

Value*

HPPI

January 2015

 

Appraiser Value

vs. Homeowner

Perception of

Value*

National Composite

95.53

-0.42%

+3.37%

-1.75%

+0.18%

*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

January 2016

 

January 2005 =

100

HVI

January 2016

vs.

December 2015

% Change

HVI

January 2016

vs.

January 2015

% Change

HPPI

January 2016

 

Appraiser Value

vs. Homeowner

Perception of

Value*

HPPI

January 2015

 

Appraiser Value

vs. Homeowner

Perception of

Value*

West

106.5

-1.26%

+5.46%

-1.48%

+0.69%

South

94.9

+1.14%

+3.53%

-1.71%

+0.10%

Northeast

93.55

-1.43%

-1.37%

-1.98%

+0.02%

Midwest

79.26

-2.44%

-1.29%

-2.04%

-0.11%

*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

January 2016

 

Appraiser Value

vs. Homeowner

Perception of

Value*

HPPI

December 2015

 

Appraiser Value

vs. Homeowner

Perception of

Value*

HPPI

January 2015

 

Appraiser Value

vs. Homeowner

Perception of

Value*

San Jose

+4.79%

+4.99%

+6.28%

Denver

+4.13%

+4.26%

+3.97%

San Francisco

+3.52%

+3.94%

+4.59%

Dallas

+2.44%

+2.43%

+4.10%

Houston

+2.31%

+2.36%

+3.42%

Portland

+2.00%

+2.09%

+3.54%

Boston

+1.18%

+1.30%

+2.11%

Sacramento

+1.16%

+1.15%

+2.99%

Los Angeles

+0.61%

+0.74%

+3.28%

Riverside, CA

+0.57%

+0.69%

+0.82%

San Diego

+0.40%

+0.33%

+0.31%

Washington DC

+0.39%

+0.29%

+1.60%

Las Vegas

+0.33%

+0.35%

+2.32%

Miami

+0.16%

+0.10%

+1.28%

Seattle

-0.34%

-0.45%

+2.92%

Minneapolis

-0.58%

-0.64%

+1.53%

Tampa

-0.73%

-0.84%

-0.24%

Atlanta

-0.76%

-0.86%

+0.19%

Phoenix

-1.02%

-1.02%

+1.75%

Cleveland

-1.52%

-1.72%

-0.97%

Charlotte

-1.98%

-2.04%

-1.62%

Kansas City

-2.02%

-1.83%

-3.73%

New York

-2.21%

-2.07%

-0.83%

Detroit

-2.66%

-2.43%

+2.36%

Chicago

-2.85%

-2.85%

-0.38%

Baltimore

-3.10%

-3.04%

+0.12%

Philadelphia

-3.64%

-3.50%

-1.59%

*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 $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 14,000 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.

Photo - http://photos.prnewswire.com/prnh/20160208/330895-INFO 

SOURCE Quicken Loans



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