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The gap between homeowners and appraisers regarding home values continues to get smaller, according to the Quicken Loans Home Price Perception Index. .

The appraised values in January were 1.75% lower than homeowner expectations. This is the fifth consecutive month that values and homeowner estimates have come closer together.

In terms of home values, the scale tilted a bit toward buyers as the values fell 0.42%. However, they’re still up 3.37% over the previous January.

Home Price Perception Index (HPPI)


Nationally, homeowners and appraisers are getting nearer to agreement on home values. Still, there are some big discrepancies regionally between them.

Quicken Loans Chief Economist Bob Walters said these local numbers are much more important than any national average.

“It’s always important to understand your local real estate market,” said Walters. “If home values are growing in the area, homes may be gaining equity faster than consumers realize. On the other hand, if the local market is struggling, the appraisers – who are most aware of home value changes – may recognize this before homeowners come to terms with reality.”

Taking a look at regional trends, home values are closest in the West where homeowners are only overvaluing their homes by 1.48%. It’s important to note that many housing markets in this region are strong and homeowners are underestimating the value of their homes in many areas where things are definitely on an upswing. Six of the Western markets measured have homeowners undervaluing their homes by 2% or more.

The West is followed by the South, where homeowners are overvaluing their homes by 1.71% and the Northeast where the gap is 1.98%. The difference of opinion is largest in the Midwest at 2.04%.

In the metro data, homeowners in San Jose, Calif., continue to have the most undervalued homes with appraiser estimates coming in 4.79% above those of homeowners. Philadelphians continue to overvalue their homes by a wide margin with their estimations coming in at 3.64% above appraiser opinion.

Home Value Index (HVI)


Home values were down 0.42% in January. However, they’re up 3.37% since this time last year.

The only region to show a gain for the month was the South, which was up 1.14% and 3.53% for the year. Meanwhile, the Midwest said home values dropped 2.44% and are down 1.29% annually. In the Northeast, values are down 1.43% and 1.37% for the year. In the West, values are still up 5.46% year after year despite being down 1.26% for the month.

Walters said that many of the changes in home values right now are being driven by supply and demand.

“Home valuations continue to rise as the economy strengthens and buyers find homeownership often cheaper than renting,” Walters said. “The number of potential homebuyers outpaced sellers in some markets. On the other hand, some areas are more balanced, producing slower grow or even a slight decline in some months. It is important to remember that tepid growth is not a cause for concern, but rather a sign of a healthy and sustainable market.”

The Quicken Loans Home Price Perception and Home Value Indexes are released on the second Tuesday of each month in the Quicken Loans Press Room.

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