Quicken Loans, the nation’s second largest retail mortgage lender, today announced the average appraisal in November was 1.87 percent lower than the value the homeowner expected, according to the company’s national Home Price Perception Index (HPPI). The difference between the values was slightly higher in October, making November the third consecutive month the gap between values have narrowed. Overall, November marks the 10th straight month homeowners’ expectations of their home’s value exceeded the appraisers’ valuation, according to the national index.
The nation’s average home values continued to rise in November according to Quicken Loans’ national Home Value Index (HVI). Appraised values rose an average of 1.08 percent since October, and have increased 4.84 percent year-over-year.
Home Price Perception Index (HPPI)
The HPPI, Quicken Loans’ exclusive measure of homeowners’ perception of value, found owners’ estimated value was 1.87 percent higher than the value appraisers reported. While homeowner opinion of value remains above appraiser’s valuation, November is the third consecutive month the gap between homeowner and appraisal estimates narrowed. When viewed at a metro-area level, appraised values are higher than what homeowners estimated in much of the West. Many of the eastern and midwestern cities examined are showing similar results to the national index – with appraisals falling below what homeowners expected.
“The variation in HPPI values across the country is a reminder of how localized real estate truly is,” said Bob Walters, Quicken Loans Chief Economist. “While home values continue to make leaps forward on the west coast, it takes time for the homeowner to recognize those gains. In the same vein, home value increases are moderating in much of the country, causing homeowners to be overly optimistic about their property’s value.”
Home Value Index (HVI)
The country’s average home values are continuing to climb at a measured pace. Home values increased 1.08 percent from October to November, according the national HVI – the only measure of home value based solely on recent appraisals used in mortgage transactions. Values also rose 4.84 percent since November 2014. The South had the largest home value growth from October to November, however the West continues to lead in yearly increases in appraised values.
“Home values continue to be driven higher as the economy improves and the desire for homeownership increases,” Walters explained. “Gains aren’t equal. In some areas, demand is robust, leading to considerable home value increases. Other markets are more balanced, resulting in more steady, measured home value growth.”
source: press release from Quicken Loans