Homeowner and appraiser disagreement on home values got a little more pronounced in May, with homeowners overestimating value by 1.93%.
The good news is that home values are once again higher, up 0.63% in May and 4.92% on the year.
Home Price Perception Index (HPPI)
The difference between homeowner and appraiser opinion of home value widened 0.03% in May, with homeowners inflating home value by 1.93%. This is a continuation of a trend that’s been happening for the last six months.
Despite the continuing national trend, Quicken Loans Executive Vice President of Capital Markets Bill Banfield said that it’s much more important to focus on the neighborhood right in front of us.
“It’s important for consumers to see the HPPI and not only think about the difference in perceptions but the different perceptions across the country,” said Banfield. “Home values, and home value changes, vary widely depending on the city you’re in. Homeowners, and those looking to buy a home, should keep a close eye on their local market to better understand home values in their area and the trend they are on.”
On a regional basis, homeowners in the West are closest to appraisers, overestimating value by just 1.63%. The region is followed by the South and Midwest at 1.90% and 1.97%, respectively. The Northeast brings up the rear, with homeowners there overestimating value by 2.12%.
Turning to metropolitan data, homeowners in Denver continue to have the most undervalued homes, with appraisers pricing their homes 2.58% higher than homeowner estimates. Philly residents are still valuing homes too high: Their estimates are 3.32% higher than appraisal values. Kansas City, Missouri wins the prize this month for being closest to the button, overestimating values by just 0.12%.
Home Value Index (HVI)
Across the country, home values rose 0.63% in May and 4.92% on the year.
Banfield said that despite regional differences, market conditions dictate a trend toward higher home values.
“The strong demand for housing paired with the low levels of inventory continue to push values higher,” he said. “Prices are rising as values push higher, making many parts of the country enticing markets for sellers. Many owners will find that they can get more than expected out of their home.”
The Northeast saw home values falling 1.63% in May, and they’re up just 1.15% on the year. Other regions saw gains, with the South up 0.51%, and 5.07% on the year. The Midwest was up 1.00%, and 5.11% annually. Finally, the West saw gains of 1.51% in May; annual price growth in the region is at 6.85%.
Do these numbers have you thinking it’s time to buy before prices rise further? Maybe you’re thinking it’s a perfect time to refinance and cash out some of your equity. If you think you’re ready, you can get started online through Rocket Mortgage® by Quicken Loans®. If you’d rather get started over the phone, feel free to give us a call at (800) 785-4788.
The Quicken Loans Home Price Perception and Home Value Indexes are released on the second Tuesday of each month on the Quicken Loans Press Room.
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