Owner and Appraiser Opinions Nearing Alignment as Home Value Growth Slows

DETROIT, Nov. 13, 2018 /PRNewswire/ -- October marks the eighth-straight month with less than half a percent difference between appraisals and homeowner estimates. Quicken Loans Home Price Perception Index (HPPI) showed appraised values were and average of 0.28 percent lower than owners expected, at a national level.

While home owners are seeing eye-to-eye with appraisers, home value growth is starting to slip. Appraised values decreased 0.55 percent between September and October, but have risen 4.39 percent since October 2017. While this is still healthy annual growth, it is the lowest year-over-year increase in the last twelve months.

Home Price Perception Index (HPPI)

Quicken Loans' HPPI, which compares appraisals to the estimated value homeowners provide at the beginning of the mortgage process, indicates a general understanding of home values nationally, with some variation across the country. The average homeowner expectation in October was 0.28 percent too high. This is a vast improvement over the last year, when there was nearly a 1 percent difference between the two data points. When viewed by the metro area, appraisals range from 2 percent lower than what the homeowners estimated in Chicago to nearly 3 percent higher than expected in Boston.  

"With homeowner estimates and appraiser opinions moving more closely together, mortgages are less likely to run into snags in the process," said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. "With the combination of a better understanding of appraisal values, and continued home value increases, this could be a good time for homeowners to tap into their growing equity to pay off higher interest debt or make home improvements."   

Home Value Index (HVI)

Appraised values, as measured by Quicken Loans' HVI, continued to make gains over 2017 levels, despite a small monthly dip. Home values jumped 4.49 percent year-over-year, the smallest gain this year, but still outpacing inflation. The West posted the highest annual home value gain even though it showed the largest decline from September to October of this year. The home value growth in the Northeast is the most sluggish of all the regions, with just a 2.59 percent annual increase in appraised values and a 0.48 percent decline month-over-month.

"The pace of home price growth appears to be moderating and varies by region representing a healthy adjustment to strong price gains of the past," Banfield said. "Slower gains in prices can balance out changes in interest rates affecting affordability for those looking to purchase a new home."

*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 more than $400 billion of mortgage volume across all 50 states from 2013 through 2017. 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 2018 and has been included in the magazine's top 1/3rd of companies named to the list for the past 15 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