Quicken Loans Study Finds Owners Overestimate Home Values Nationally, Perceptions Vary Widely Across the Country

  • August 9, 2016
• Quicken Loans National HPPI shows appraised values were 1.69% lower than homeowners estimated in July
• Home values increased 1.43% in July and rose 6.24% year-over-year, according to the national HVI

DETROIT, August 9, 2016 – Quicken Loans, the nation’s second largest retail mortgage lender, today announced its National Home Price Perception Index (HPPI) found appraised values were an average of 1.69 percent lower than what homeowners expected in July. The gap between these two measures of home values narrowed since June when appraisals lagged behind expectations by 1.93 percent.

Home values continued to rise in July, according to the Quicken Loans Home Value Index (HVI), the only measure of home value changes based solely on appraisals. The national index reflected a 1.43 percent increase from June, and a year-over-year gain of 6.24 percent.

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Home Price Perception Index (HPPI)

Homeowners and appraisers had differing opinions of home values in July, but the value perceptions didn’t vary as widely as in June. The average appraisal was 1.69 percent lower than homeowners’ estimated value, according to the national HPPI. This is compared to a difference of 1.93 percent in June. Bucking the national trend, homeowner perception has not kept up with rising home values in the west. Appraised values were higher than homeowners estimated in Western cities including Denver, San Jose and San Francisco – by as much as 3.10 percent, 2.52 percent and 2.36 percent respectively.

“One of the most important things for consumers to take away from the HPPI is just how regionalized housing truly is,” said Quicken Loans Chief Economist Bob Walters. “While those on the West coast are being surprised by their high appraisals, homeowners in the Northeast and Midwest are more likely to be shocked by their low values. If homeowners keep an eye on local home sales, they can be better aware of their current home value and not be shocked when they go to sell or refinance.”

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Home Value Index (HVI)

Appraisals continued their upward march in July rising 1.43 percent since June, as reported by the national HVI. This is a quicker pace than the previous month, when home values rose 0.84 percent. The annual growth continues a trend of especially strong year-over-year appreciation, increasing 6.24 since the same period one year ago. All four regions reflected the robust growth shown nationally with annual increases that ranged from 3.85 percent in the Northeast to 6.84 in the Midwest.

“Home values across the country have been growing at rapid pace, driven by especially enthusiastic buyers this summer,” said Walters. “While the lack of inventory compared to the mass of interested buyers has been the narrative for some time, the effect on the market has intensified as competition for available homes heated up and quickened the pace of rising home values.”

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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 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 the past three years, 2014 – 2016.

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 12 years, ranking No. 1 in 2016, 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.

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