Quicken Loans Study: Home Value Perceptions Stable as Summer Ends

DETROIT, Oct. 9, 2018 /PRNewswire/ -- For the second consecutive month, home value perceptions remained steady with owners barely overvaluing their home – at a national level. In September, the average appraisal was only 0.29 percent less than what owners expected, according the Quicken Loans National Home Price Perception Index (HPPI). This is consistent with August, when appraisals were 0.28 percent lower than estimated. This gap between the two opinions is much improved from the previous year, when appraiser opinions were an average of 1.14 percent lower.

Home value perceptions may be holding steady, but the growth of appraisal values slowed in September. The National Quicken Loans Home Value Index (HVI) showed the average appraisal value rose 0.35 percent since the prior month – less than half of the growth rate from August. The annual increases in value are more consistent, with 5.69 percent year-over-year jump in September vs a 5.79 increase in August.

Home Price Perception Index (HPPI)

Nationally, the home values estimate owners give at the beginning of the mortgage process is nearly even with the opinions appraisers give near the end of the financing process. In September, the average owner estimate was 0.29 percent lower than the value supplied by the appraiser, according to the Nationally HPPI. Not only that, but the number of metro areas where appraisals were more likely to be lower than expected dropped by 40 percent in the last year.

"A wide gap between the estimated home value and the appraised value can cause a mortgage to be reworked, or in some cases, scrapped altogether," said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. "All the more reason for homeowners to be realistic when their mortgage banker asks them what they think their home is worth when they start the financing process. Our hope is that the HPPI data on past neighbor transactions can help a homeowner better estimate the value of their home in order to set their financing up for success."

Home Value Index (HVI)

Home appraisal values rose 0.35 percent in September, according to the Quicken Loans HVI – the only measure of home value change based solely on appraisal data. Annually, home values posted healthy growth, increasing 5.69 percent year-over-year. The West was the only region to buck the trend of monthly gains – posting a 0.56 percent decline in value from August to September. All four regions analyzed show annual growth ranging from a 4.22 percent increase in the Northeast to a 7.06 percent jump in the South.

"Rapid price increases that have spanned more than half a decade have started to affect affordability as average wage increases struggle to keep up," said Banfield. "While home values are still rising, especially with solid annual jumps, a slowdown in monthly growth is expected to allow the market balance with the more moderate inflation."

*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 eight consecutive years, 2010 – 2017, 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

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