Appraised Values Remain Slightly Lower Than Homeowner Expectations, According to Quicken Loans Study

  • December 8, 2015
• Nationally, appraised values were an average of 1.87% lower than homeowner expectations.
• Gap between appraisal and owner estimates narrow for the third consecutive month.
• Home values rose 1.08% in November, 4.54% from a year prior, according to national HVI.

DETROIT, December 8, 2015 – 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.

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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.”

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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.”

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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.

The HPPI and HVI are released on the second Tuesday of every month. Both of the 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 six consecutive years, 2010 – 2015, 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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