Homeowners Continue to Overvalue Their Homes in March According to Quicken Loans Study

  • April 14, 2015

– March overall home values tick down from the previous month –

• Appraiser opinions of values remained higher than homeowner estimates in 17 of the 27 metro areas measured.
• Home values show small declines across the country, but post modest yearly increases

DETROIT, April 14, 2015 – Detroit-based Quicken Loans, the nation’s second largest retail mortgage lender and the largest lender of FHA mortgages, today reported appraiser opinions of home values fell further below homeowner opinions in March, according to the lender’s national Home Price Perception Index (HPPI). On a national scale, appraiser opinions are 0.40 percent lower than homeowner estimates.

Home values also declined in March. The national Home Value Index (HVI) showed home values dipped 0.56 percent according to the appraisal-based report.

Home Price Perception Index (HPPI)

Nationally, appraiser opinions were lower than homeowner estimates by 0.40 percent in March, compared to February when appraiser opinions were only 0.13 percent lower than homeowner estimates. This slight change in the national HPPI was consistent with most metro areas examined, nearly all of which saw little perception change from the month prior. Seventeen of the 27 metro areas analyzed are still seeing appraiser opinions higher than homeowner estimates. Although the difference is minor, Tampa, Florida’s HPPI value turned negative in March, meaning on average, appraiser opinions are now greater than homeowner estimates.

“While the national HPPI shows appraiser opinions trailing those of homeowners, it is encouraging to see the gap at such a narrow margin,” said Quicken Loans Chief Economist Bob Walters. “Although home affordability for buyers can begin to be a problem in a seller’s market, which we are seeing in many of the country’s metro areas, homeowners in a majority of the nation’s largest markets can take solace in the fact that their home may have more equity than they realize.”

Home Value Index (HVI)

Home values changed course in March, showing a decrease of 0.56 percent, according to the national HVI. On a yearly basis, homes were valued 6.42 percent more in March 2015 than in March 2014. This is a slowdown from the previous month, when values showed an 8.46 percent year-over-year growth in February. All four of the regions analyzed saw similar results of small monthly home value declines and modest yearly increases.

“Despite negative housing trends garnering attention, home values nationally are still displaying healthy gains over the long term,” continued Walters. “The market is in a lull right now, and all eyes are focused on homeowners as they decide whether to list their home. The upcoming peak real estate season could set the course for the market and push home values positively or negatively in a big way.”

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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 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.

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 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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