The Second Half of 2014 Saw the Opinions of Home Values between Homeowners and Home Appraisers Narrow

  • January 13, 2015

– Home values moved lower in December, the first loss in 10 months –

  • December marks the sixth consecutive month appraiser and homeowner opinions have moved closer together, according to the national HPPI.
  • Appraisers in more than 77% of the included metro areas still have higher opinions of home values than owners.
  • The national HVI shows that home values fell 0.74% from the previous month, but increased by 2.26% since December 2013.

DETROIT, January 13, 2014 – Detroit-based Quicken Loans, the nation’s second largest retail mortgage lender, today reported that its Home Price Perception Index (HPPI) shows the gap between home value opinions of homeowners and appraisers is continuing to narrow, with appraisers’ opinions of home values 1.43 percent higher than homeowners’, when viewing the national composite. This is the sixth consecutive month home value opinions have moved closer together, with the gap narrowing each month since July 2014.

The Home Value Index (HVI), showed that values posted a slight decrease from November to December 2014, falling 0.74 percent, according to the national composite. This is the first monthly decrease in 10 months. However, home values increased 2.26 percent in December when compared to December of 2013.

Home Price Perception Index (HPPI)

“As a national mortgage lender, it is always encouraging to see more Americans understanding the housing market,” said Bob Walters, Quicken Loans Chief Economist. “From the HPPI, it is clear that homeowners are more aware of the state of the home values in their neighborhood, as homeowner estimates and appraiser opinions continue to approach equilibrium. A part of this awareness is due to the relative stabilization in prices we’ve seen in the last few months; it will be interesting to see if perceptions remain close if we see more dramatic shifts in home values in 2015.”

The Quicken Loans HPPI, a first-of-its-kind look at the difference between appraiser and homeowner opinions of home values, shows that appraisers’ home value opinions in December were 1.43 percent higher than homeowners’, according to the national composite. This shows that the gap between the two estimates is narrowing compared to November 2014, when appraisers valued homes 1.56 percent higher than homeowners’ estimates. The values are also closer together than they were a year ago, when the difference was 1.72 percent in December 2013.

Appraisers in more than 77 percent of the metro areas examined by Quicken Loans still have higher opinions of home values than owners do, although the gap widened in55 percent of the metro areas. The areas where the two opinions are closest together are Baltimore, Maryland, with appraiser values 0.46 percent higher than owner estimates and Chicago where appraised values are 0.14 percent lower than homeowner opinions.

Home Value Index (HVI)

The Quicken Loans HVI, a measure of home value changes based exclusively on data acquired from tens of thousands of appraisals, showed home value declines from November to December 2014. The index reported that values fell 0.74 percent from the previous month, but increased by 2.26 percent since December 2013 on the national composite. The four geographic regions the HVI examines mirror the national trend, all of which had monthly decreases of one percent and yearly increases ranging from 1.52 percent in the West to 4.0 percent in the South.

“There should not be much emphasis put on the fact that values have fallen slightly over any one month period of time; in a healthy economy it is common to see some volatility in month-over-month numbers,” Walters continued. “We will keep a close eye on the annual home value change. While some argue that these declines are merely a correction to previously over-inflated home values, if the trend continues it could be bumpy for homeowners.”

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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 the 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 Quicken Loans HVI is a 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 among with 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.

Quicken Loans was named among the top-30 companies on FORTUNE magazine’s annual “100 Best Companies to Work For” list for the last 11 consecutive years, ranking #5 in 2014. It has been recognized as one of Computerworld magazine’s ’100 Best Places to Work in IT’ the past ten years, ranking No. 1 in 2014, 2013, 2007, 2006 and 2005. The company moved its headquarters to downtown Detroit in 2010, and now more than 10,000 of its nearly 12,000 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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