Quicken Loans: Perception Gap Between Homeowner and Appraiser Valuation Narrows Slightly

  • November 10, 2015
Appraisals were just 1.98% lower than the values the homeowners were expecting.
• October marks the second month the gap between values narrowed, and ninth consecutive month where homeowner’s estimates of value exceeded the appraised value of the home.
• Nationally, home values increased 1.07% in October, 4.01% since 2014.

DETROIT, November 10, 2015 – Quicken Loans, the nation’s second largest retail mortgage lender, today reported average home appraisals in October were 1.98 percent lower than what homeowners expected marking the second consecutive month the spread has tightened. The perception gap was slightly larger in September, with appraised values 2 percent higher than what homeowners estimated. 

Home values rose at an increased pace in October according to Quicken Loans’ national Home Value Index (HVI). Average appraised values rose 1.07 percent in October, compared to near flat growth in September. The Northeast led the country in home value gains with a 1.94 percent increase, while growth in the West was slowest, with a 0.49 gain.

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Home Price Perception Index (HPPI)

The difference between what homeowners perceived their homes to be worth and what appraisers valued them narrowed in October, albeit slightly. Average appraised values in October were 1.98 percent lower than what homeowners estimated according to the national HPPI. This is the second month the gap between appraiser opinions and homeowner expectations narrowed, although October marks the ninth consecutive month owners overestimated their home’s value.

“It’s too early to call it a trend, but it is encouraging to see the gap between the estimates homeowners provide and the appraised values starting to narrow,” said Quicken Loans Chief Economist Bob Walters. “The more homeowners are in line with appraisers, the easier it will be to refinance their mortgage and easier for those looking to buy a home. If the two are aligned, it eliminates one of the top stumbling blocks in the mortgage process.”

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Home Value Index (HVI)

Home values climbed 1.07 percent in October according to Quicken Loans’ national HVI, the only measure of home values based completely on appraisals. The increase comes after two months of practically flat home value changes. Values continue to raise annually as well, with a 4.01 percent gain compared to October 2014. All four regions measured saw increases. The Northeast had the highest home appreciation, with a 1.94 percent increase. The Midwest, South and West regions all had value growth of less than 1 percent.

Home values continue to make steady, healthy, growth,” said Walters. “Equity gains increase homeowner faith and enthusiasm in the housing market. There are still many Americans underwater, but with every bump in equity more homeowners who have been waiting to list their home are able to sell or more easily refinancewhich takes pressure off of those homeowners and provides housing inventory for first time homebuyers.”

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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 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 $200 billion of mortgage volume across all 50 states since 2013. 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.

Additional graphics are available below.

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