Appraisal Values Lag Homeowner Expectations, Quicken Loans Study Shows
- Quicken Loans' National HPPI shows appraised values were 1.90% lower than homeowners estimated in April
- Home values rose 1.06% nationally in April, with a 5.08% year-over-year increase, according to the Quicken Loans HVI
DETROIT, May 9, 2017 /PRNewswire/ -- Homeowner and appraiser views of home values are diverging more each month. In April, appraisals were an average of 1.90 percent lower than what the owner expected, according to the National Quicken Loans Home Price Perception Index (HPPI). This is the fifth consecutive month the gap between appraiser opinions and homeowner estimates of home value widened.
While the HPPI shows a widening perception gap, appraised values continue to rise at a steady pace. The National Home Value Index (HVI), the only measure of home value change based solely on appraisals, showed values rose 1.06 percent in April. Home values also increased when viewed annually, rising 5.08 percent year-over-year.
Home Price Perception Index (HPPI)
Owner estimates of home values were higher than appraiser opinions by 1.90 percent, as reported by the national HPPI. This is compared to a 1.77 percent disparity between home value opinions in March. April marks the fourth month the spread between home value opinions widened nationally. A wide range of perceptions persists across the country, but month-to-month change in most metros was minor. The study continues to find appraised values higher than expected in the West, while it was more likely to have appraisals lower than owners estimated in the Midwest and East.
"The appraisal is one of the most important data points in a mortgage transaction. This single number can impact how much money a buyer needs to bring to closing, or the equity that is available to the homeowner on a refinance," said Quicken Loans Vice President of Capital Markets, Bill Banfield. "If homeowners have a grasp on home value differences throughout their local area, it can lead to a smoother mortgage process."
Home Value Index (HVI)
Home value growth not only continued, but accelerated in April. The National HVI showed appraisal values rose 1.06 percent from the previous month and increased 5.08 percent since April 2016. This is compared to 3.30 percent year-over-year growth in March. All regions measured by the HVI show positive momentum, ranging from 3.54 percent annual growth in the Northeast to a 6.52 percent year-over-year increase in the West.
"Home values were pushed higher once again by the demand for housing outpacing the stock of available homes. This effect is intensified by the start of the spring buying season," Banfield said. "While sellers are obviously thrilled as their investment continues to grow in value, this trend could make homebuyers set their sights on smaller homes or less pricey neighborhoods. I would encourage homeowners who are considering listing their home to take advantage of the opportunity they have in this sellers' market."
| HVI April 2017
January 2005 = 100 |
HVI April 2017 vs. March 2017 % Change |
HVI April 2017 vs. April 2016 % Change |
HPPI April 2017
Appraiser Value |
HPPI April 2016
Appraiser Value |
|
| National Composite |
101.52 |
+1.06% |
+5.08% |
-1.90% |
-1.95% |
*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 April 2017
January 2005 = 100 |
HVI April 2017 vs. March 2017 % Change |
HVI April 2017 vs. April 2016 % Change |
HPPI April 2017
Appraiser Value |
HPPI April 2016
Appraiser Value |
| West |
122.04 |
+1.03% |
+6.52% |
-1.65% |
-1.66% |
| South |
103.79 |
+0.67% |
+5.02% |
-1.83% |
-1.95% |
| Midwest |
84.1 |
+0.80% |
+4.08% |
-2.02% |
-2.11% |
| Northeast |
97.27 |
+1.96% |
+3.54% |
-2.17% |
-2.13% |
*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 April 2017
Appraiser Value |
HPPI March 2017
Appraiser Value |
HPPI April 2016
Appraiser Value |
| Denver, CO |
+2.72% |
+2.69% |
+3.32% |
| Dallas, TX |
+2.55% |
+2.25% |
2.05% |
| Portland, OR |
+1.44% |
+1.77% |
+1.74% |
| Seattle, WA |
+1.32% |
+1.31% |
-0.14% |
| San Francisco, CA |
+1.10% |
+1.31% |
+2.88% |
| Los Angeles, CA |
+0.99% |
+1.17% |
+0.55% |
| Boston, MA |
+0.82% |
+1.10% |
+0.62% |
| San Jose, CA |
+0.72% |
+0.70% |
+3.56% |
| Charlotte, NC |
+0.53% |
+0.99% |
-1.23% |
| Sacramento, CA |
+0.50% |
+0.59% |
+1.13% |
| Houston, TX |
+0.45% |
+0.53% |
+1.85% |
| Miami, FL |
+0.44% |
+0.33% |
-0.23% |
| Minneapolis, MN |
+0.42% |
+0.43% |
-0.66% |
| San Diego, CA |
+0.42% |
+0.30% |
+0.01% |
| Kansas City, MO |
+0.32% |
+0.47% |
-1.59% |
| Riverside, CA |
-0.16% |
-0.04% |
+0.50% |
| Phoenix, AZ |
-0.37% |
-0.57% |
-0.60% |
| Las Vegas, NV |
-0.38% |
-0.41% |
-0.34% |
| Washington, D.C. |
-1.05% |
-0.70% |
-0.09% |
| Atlanta, GA |
-1.11% |
-1.01% |
-1.36% |
| Detroit, MI |
-1.19% |
-1.26% |
-3.14% |
| Tampa, FL |
-1.38% |
-1.40% |
-1.06% |
| New York, NY |
-1.86% |
-1.65% |
-1.88% |
| Cleveland, OH |
-2.26% |
-2.41% |
-2.03% |
| Chicago, IL |
-2.37% |
-2.14% |
-2.95% |
| Baltimore, MD |
-3.01% |
-3.18% |
-3.31% |
| Philadelphia, PA |
-3.37% |
-3.20% |
-3.46% |
*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 has closed more than $300 billion of mortgage volume across all 50 states between 2013 and 2016. Quicken Loans moved its headquarters to downtown Detroit in 2010, and now more than 13,500 of its 16,000 team members work in the city's urban core. The company 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. The company is owned by Rock Holdings, Inc., parent company of several FinTech businesses. Quicken Loans is also part of a Family of Companies comprising nearly 100 affiliated business spanning multiple industries. For more information, please visit QuickenLoans.com.
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SOURCE Quicken Loans
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