Owner Perception of Home Values Improve, Appraisals Still 2% Lower than Expected Nationally

  • May 10, 2016
• Quicken Loans HPPI: appraised values were 1.95% lower than homeowners estimated in March.
• Home values decreased 0.66% in March but rose 3.79% year-over-year, according to the national HVI.

DETROIT, May 10, 2016 – Quicken Loans, the nation’s second largest retail mortgage lender, today announced appraiser valuations were 1.95 percent lower than what homeowners estimated in April, according to the national Home Price Perception Index (HPPI). The gap between the two values narrowed since March when appraiser opinions of value were 2.17 percent lower than homeowner expectations. The HPPI is based on the company’s mortgage application and appraisal data.

Appraisers’ valuations also continued the upward trend in April. Home values dipped a slight 0.66 percent since March, but grew at a measured pace on an annual basis – rising 3.79 percent according to Quicken Loans’ national Home Value Index (HVI). The HVI is the only measure of home value change based solely on appraisals, one of the most important data points in the mortgage process.

Home Price Perception Index (HPPI)

Owners are still overestimating their home’s value, but are closer to appraisers’ opinions of value than in March. Nationally, appraised values were 1.95 percent less than what homeowners expected. Despite some fluctuations, the HPPI has spent the majority of the past year around the -2 percent mark, leaving homeowners slightly lagging the opinions of owners. While there have been monthly changes at the metro level, an underestimation of value among homeowners in the western cities has remained consistent. Homeowners in midwestern and eastern cities are seeing the opposite, consistently overestimating their home’s value.

“The HPPI is in a healthy trend, nationally,” said Quicken Loans Chief Economist Bob Walters. “While everyone wants their appraisals to come back showing more equity than anticipated, like some homeowners in the West, the discrepancy we are seeing now won’t likely derail a mortgage transaction.”

Home Value Index (HVI)

Owners enjoyed an annual increase in home values nationally and in all of the regions measured by the HVI, despite a national dip in values since March. Nationally, appraised values slid 0.66 percent month-over-month, but increased 3.79 percent since April 2015. The West was the only region with a monthly drop in home values, falling 1.72 percent. However, it continued to post the largest year-over-year growth with an increase of 4.86 percent.

“The steady annual increase in home values shows sustainable growth and an improving economy,” said Walters. “We always look for gains to be similar to inflationary growth while avoiding the hikes that could lead to bubble fears. We are currently in that range, which should come as a more comforting sign to many homeowners.”

###

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 more than $220 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 ranked No. 5 on FORTUNE magazine’s annual “100 Best Companies to Work For” list in 2016, and has been among the top-30 companies for the last 13 years. 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 15,000 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.

Print Friendly