Quicken Loans Study Shows Less Than 1% Difference Between Owner and Appraiser Opinions of Home Values

  • November 14, 2017
• Quicken Loans’ National HPPI shows appraised values 0.99% lower than homeowners estimated in October
• Home values rose 0.71% nationally in October, with a 4.76% year-over-year increase, according to the Quicken Loans HVI

DETROIT, November 14, 2017 – Opinions of home values from appraisers and homeowners continue to converge, with the gap between the two viewpoints narrowing for a fifth-straight month. Appraisals were an average of 0.99 percent lower than the homeowners thought they would be on a national scale, according to the Quicken Loans Home Price Perception Index (HPPI).

Despite the differing opinions, appraisal values continue to rise. Nationally, home values increased an average of 0.71 percent in October and rose 4.76 percent as compared to this time the previous year.

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Home Price Perception Index (HPPI)

Owner’s estimates of their home’s value rose above the actual appraised value by an average of 0.99 percent, according to the National HPPI. This marks the fifth-consecutive month the gap between the two value opinions narrowed. Also, the HPPI is now the closest to equilibrium it has been since April 2015. The trend of appraisals surpassing homeowners’ estimates in Western cities continued in October, with appraisals as much as 3.13 percent higher than expected in Dallas. On the other hand, Eastern and Midwestern cities were more likely to have an appraisal below the owner’s estimate.

“Based on the HPPI, it appears homeowners in the markets where prices are rising faster than the national average – like Denver, Seattle and San Francisco – are continuing to under-estimate just how quickly home values are rising, so the average appraisal is higher than homeowner estimate,” said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “On the inverse of that, homeowners in areas where the values aren’t rising as fast may think they are rising faster than they are, leading to the appraisal lagging the estimate.”

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Home Value Index (HVI)

The HVI, the only measure of home value change based solely on appraisal data, showed values increasing at a measured pace month-over-month and making larger strides on an annual basis. Nationally, appraised values rose 0.71 percent from September to October and jumped 4.76 percent year-over-year, according to the HVI. All regions had similar annual growth, however the Midwest and the West had slight dips in monthly value.

“As we enter the traditionally slower demand season in the home purchase market, persistent supply constraints may keep home prices elevated,” said Banfield. “Compared to the previous year, our economy continues to improve and attract homebuyers who may have been on the sidelines during the past few years. This will add additional demand to the equation.”

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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 $300 billion of mortgage volume across all 50 states between 2013 and 2016. Quicken Loans moved its headquarters to downtown Detroit in 2010, and now more than 17,000 team members from Quicken Loans and its Family of Companies work in the city’s urban core. The company 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 seven consecutive years, 2010 – 2016, and highest in customer satisfaction among all mortgage servicers the past four years, 2014 – 2017.

Quicken Loans was ranked #10 on FORTUNE magazine’s annual “100 Best Companies to Work For” list in 2017, and has been among the top-30 companies for the past 14 consecutive years. The company has been recognized as one of Computerworld magazine’s ’100 Best Places to Work in IT’ the past 13 years, ranking #1 for eight of the past twelve years including 2017. The company is a wholly-owned subsidiary of Rock Holdings, Inc., the parent company of several FinTech and related businesses. Quicken Loans is also the flagship business of Dan Gilbert’s Family of Companies comprising nearly 100 affiliated businesses spanning multiple industries. For more information and company news visit QuickenLoans.com/press-room.

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