Quicken Loans Study Shows Homeowners Overvalued their Homes for the Eighth-Straight Month in September
- Appraiser opinions of home values were 2 percent lower than homeowner estimates in September.
- September was the first month the gap narrowed since the current trend started in February 2015.
- Nationally, home values continued to rise with a 3.11 percent year-over-year gain.
DETROIT, Oct. 13, 2015 /PRNewswire/ -- Quicken Loans, the nation's second largest retail mortgage lender, today reported appraiser opinions of home values in September were 2 percent lower than homeowner's views, according the company's national Home Price Perception Index (HPPI). The gap between the two values narrowed in September compared to the previous month, although the findings marked the eighth consecutive month homeowner estimates outpaced appraiser opinions.
Average home values across the nation remained practically flat. Home values increased 0.05 percent in September, according to the national Quicken Loans Home Value Index (HVI). This makes up for the 0.05 percent loss in home values in August. Home values are still making steady annual increases, with 3.11 percent gain compared to September 2014.
Home Price Perception Index (HPPI)
The trend of homeowners estimating their property's value higher than the actual appraised value continued in September. Nationally, appraiser opinions were an average of 2 percent below the values supplied by the homeowner. This is an improvement from August, when appraisals were 2.65 percent below what was expected by the homeowner. The HPPI has been falling, indicating appraised values lower than homeowner estimates, since its peak in June 2014. The September 2015 report marks the eighth consecutive month appraiser valuations were lower than what homeowners anticipated.
"It may not seem like homeowners assuming their home's value is 2 percent higher than appraisers' opinions is significant, but it could make a huge difference in metro areas with higher average home values," said Quicken Loans Chief Economist Bob Walters. "It could also cause complications for homeowners looking to refinance who may be close to the loan-to-value thresholds to qualify or for those looking to eliminate mortgage insurance. We encourage consumers to stay aware of sales prices on comparable homes in their area to have a better idea of their home's value."
Home Value Index (HVI)
Home values across the U.S. have remained largely unchanged from the previous month. According the national Home Value Index (HVI), home values increased 0.05 percent in September. This negated the 0.05 percent loss reported in August. There has been a 3.11 percent increase in the national average of home values compared to last year. The pace of the increase in September was slightly lower than in August, when the study showed 3.24 percent annual growth. Regionally, the West posted the largest gains, with 0.72 percent monthly and 6.03 percent annual increases. The Northeast and Midwest regions posted both monthly and annual home value losses.
"I don't think it's a coincidence the West is showing the greatest home value increases with almost all of the western cities measured in the HPPI exhibiting appraiser opinions higher than homeowner estimates," Walters continued. "Homeowners are hearing national reports of slower home value increases, or even drops in value, when that isn't the case everywhere. Appraisals are telling a different story in many western cities but homeowners may not realize home values are still making such strides."
| HVI September 2015
January 2005 = |
HVI September 2015 vs. August 2015 % Change |
HVI September 2015 vs. September 2014 % Change |
HPPI September 2015
Appraiser Value |
HPPI September 2014
Appraiser Value |
|
| National Composite |
93.74 |
+0.05% |
+3.11% |
-2.00% |
+1.62% |
*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 September 2015
January 2005 = |
HVI September 2015 vs. August 2015 % Change |
HVI September 2015 vs. September 2014 % Change |
HPPI September 2015
Appraiser Value |
HPPI September 2014
Appraiser Value |
| West |
112.13 |
+0.72% |
+6.03% |
-1.62% |
+3.40% |
| South |
95.95 |
+0.29% |
+3.33% |
-2.03% |
+2.54% |
| Northeast |
91.05 |
-0.46% |
-0.71% |
-2.13% |
-0.57% |
| Midwest |
78.37 |
-0.14% |
-0.05% |
-2.25% |
-0.10% |
*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 September 2015
Appraiser Value |
HPPI August 2015
Appraiser Value |
HPPI September 2014
Appraiser Value |
| San Jose, CA |
+5.74% |
+5.83% |
+4.86% |
| San Francisco, CA |
+4.67% |
+5.00% |
+4.69% |
| Denver, CO |
+4.40% |
+4.31% |
+3.48% |
| Houston, TX |
+2.90% |
+3.10% |
+3.94% |
| Dallas, TX |
+2.68% |
+2.68% |
+3.75% |
| Portland, OR |
+2.36% |
+2.26% |
+3.37% |
| Boston, MA |
+1.63% |
+1.74% |
+2.62% |
| Los Angeles, CA |
+1.41% |
+1.61% |
+4.09% |
| Riverside, CA |
+1.16% |
+1.20% |
-0.01% |
| Sacramento, CA |
+1.12% |
+1.07% |
+3.69% |
| Seattle, WA |
+0.44% |
+0.55% |
+1.96% |
| Las Vegas, NV |
+0.36% |
+0.60% |
+3.73% |
| Washington, D.C. |
+0.10% |
+0.45% |
+1.94% |
| San Diego, CA |
0.00% |
-0.05% |
+2.36% |
| Miami, FL |
-0.03% |
0.10% |
+2.83% |
| Minneapolis, MN |
-0.22% |
-0.01% |
+2.23% |
| Tampa, FL |
-0.70% |
-0.78% |
+1.15% |
| Atlanta, GA |
-0.81% |
-0.89% |
+2.11% |
| Phoenix, AZ |
-0.87% |
-0.57% |
+3.59% |
| Detroit, MI |
-1.14% |
-0.66% |
+1.72% |
| New York, NY |
-1.17% |
-1.12% |
-0.70% |
| Cleveland, OH |
-1.40% |
-1.35% |
-1.85% |
| Baltimore, MD |
-1.95% |
-1.65% |
+1.02% |
| Charlotte, NC |
-2.09% |
-2.04% |
-0.55% |
| Chicago, IL |
-2.52% |
-2.39% |
-0.69% |
| Kansas City, MO |
-2.95% |
-2.86% |
-1.46% |
| Philadelphia, PA |
-3.58% |
-3.31% |
-2.84% |
| *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.
Both of these 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 $140 billion of mortgage volume across all 50 states in 2013-2014. 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 five consecutive years, 2010 - 2014, 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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