Homeowner, Appraiser Home Value Opinion Gap Continues to Widen

  • June 9, 2015

– Home values post minor monthly, hearty annual, increases –

• This marks the first time in nearly two years appraiser opinions fell below homeowner estimates by 1% nationally.
• The majority of metro areas still show appraiser opinions higher than those of homeowners.
• Home values continue to display small monthly and moderate yearly increases.

DETROIT, June 9, 2015 – Detroit-based Quicken Loans, the nation’s second largest retail mortgage lender, today reported the difference between appraiser and homeowner perceptions continued to increase for the fourth consecutive month in May. Appraiser opinions of home values were 1.15 percent lower than homeowner estimates, according to Quicken Loans’ national Home Price Perception Index (HPPI). This is the first time in 22 months appraisal opinions were lower than homeowner estimates by at least 1 percent.

Home values continued to steadily climb nationally, and in many regions of the country. The national Home Value Index (HVI) increased 0.24 percent in May from its April level, and rose 4.64 percent since the previous May.

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Home Price Perception Index (HPPI)

Quicken Loans’ exclusive look at the gap between the perceptions of appraisers and homeowners showed the difference of home value opinion continued to widen on a national level. Appraiser opinions of home values were 1.15 percent lower than homeowner estimates according to May’s national index. This is a larger gap than in April, when the national index showed appraiser opinions 0.69 percent lower than homeowner estimates. Despite the widening perception gap at the national level, appraiser opinions remain higher in the majority of the metro areas examined.

“The HPPI, more than anything, is a reminder that there is no such thing as a national housing market,” said Quicken Loans Chief Economist Bob Walters. “Every city, and every neighborhood, moves in different directions based on local factors. Consumers need to remember to watch their local area closely to understand the direction their market is heading.”

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Home Value Index (HVI)

Home values were slightly higher in May according to the Quicken Loans HVI, posting a 0.24 percent increase in the national index when compared to the month prior. Annual growth remains strong, showing a 4.64 percent increase. This same theme played out in the majority of the country, with exceptions in the Northeast, which only demonstrated a 0.90 percent annual increase.

“While smaller monthly increases and a slowing of the annual growth may sound discouraging, it is precisely the measured, healthy growth that is needed to embolden homebuyers and create a sustainable housing market,” explained Walters. “A more balanced market between buyers and sellers almost always leads to continued steady home value increases.”

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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.

Additional graphics are available below.

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