The Quicken Loans Home Price Perception Index shows that the difference between appraisers’ and homeowners’ opinions on home values continued to narrow in December. Appraisers’ home value estimates were 1.43% higher than homeowners’ estimates and, last month, this difference was 1.56%.
Meanwhile, home values fell by 0.74% in the nationwide composite in December, breaking a 10-month streak of increases. However, home values have increased 2.26% since this time last year.
Home Value Index (HVI)
In December, home values fell for the first time since February 2013 in all regions across the U.S.
Quicken Loans Chief Economist Bob Walters said although attention should be paid to home values on a yearly basis, volatility in monthly figures is normal for a healthy economy.
“We will keep a close eye on the annual home value change. While some argue that these declines are merely a correction to previously over-inflated home values, if the trend continues, it could be bumpy for homeowners.”
The drop in values ranged from a 0.16% decrease in the South to a 1.91% decrease in the Midwest. There was a 0.97% drop in value in the West and a 1.32% decline in the Northeast.
Despite the drop, home values have seen substantial increases when compared to December of last year, with a gain of 2.26%.
Home Price Perception Index (HPPI)
Appraisers in 77% of the areas surveyed for the HPPI estimated home values higher than homeowners in the same areas, but the gap between these estimates is closing. The difference was 1.43% in December, down from 1.56% in November. This occurred despite a widening of the gap in 55% of metro areas. Appraiser opinions were 1.72% higher than homeowners in December of last year.
Knowing the value of your home can be very important when you get ready to sell or refinance. Walters said it’s encouraging to see that Americans have a better understanding of the market value of their homes.
“From the HPPI, it is clear that homeowners are more aware of the state of the home values in their neighborhood, as homeowner estimates and appraiser opinions continue to approach equilibrium,” Walters said. “A part of this awareness is due to the relative stabilization in prices we’ve seen in the last few months; it will be interesting to see if perceptions remain close if we see more dramatic shifts in home values in 2015.”
Home value opinions were closest in Baltimore, where appraisers rated values just 0.46% higher than homeowners, and in Chicago, where they were 0.14% lower than owner estimates.
Appraiser estimates for December 2014 averaged $2,588 higher than homeowner opinion nationwide.
The Quicken Loans Home Value and Home Price Perception Indices are released on the second Tuesday of each month on the Press Room.
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