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Appraisers and homeowners were a little further apart from each other for the first time in eight months as the average appraisal came in 0.60% below homeowner estimates.

The good news is that home values were up 0.46% in January and have risen 7.03% on the year.

Home Price Perception Index (HPPI)Home Values Continue to Rise - Quicken Loans Zing Blog

The gap between homeowner perceptions of home value and actual appraisal values was 0.60% in January, as compared to 0.50% in December. However, there’s a marked improvement compared to the same time a year ago when appraiser opinions were 1.47% below homeowner estimates.

Quicken Loans Executive Vice President of Capital Markets Bill Banfield highlighted the importance of homeowners and buyers having a realistic expectation of home value.

“The appraisal is one of the most important pieces of data in the mortgage process. Often the entire transaction hinges on the appraisal showing a number similar to what the homeowner estimated at the beginning of the process,” said Banfield. “If the appraisal is lower, it could mean the homeowner needs to bring additional cash to close, or the loan may need to be reworked. It’s very promising to see the homeowner estimate and the appraiser opinion so close together.”

Looking at regional data, homeowners in the West were again closest to actual appraised value, with an estimate coming in just 0.41% above where appraisers valued their homes. Estimates in the Midwest, South and Northeast were bunched relatively close together, coming in at 0.67%, 0.70% and 0.72% higher than appraiser opinion, respectively.

Looking at the metropolitan areas, Dallas has the nation’s hottest housing market in our data, with appraisals coming in 2.83% higher than homeowner estimates. Homeowners in Cleveland need to rethink their estimates this month. They come in 1.95% above actual appraised value. Atlanta gets this month’s prize for the market closest to balance between estimates and appraisals. Estimates there come in just 0.09% higher than appraised value.

Home Value Index (HVI)

Home Values Continue to Rise - Quicken Loans Zing Blog

Home values were up 7.03% compared to the same time last year after increasing 0.46% nationwide in January.

Banfield blames the rapid price growth on a lack of available homes on the market.

“Low inventory of homes available for sale and a growing economy have led to steadily rising home values as indicated by the strong annual increase of the HVI index,” he said. “The recent increase in interest rates could test affordability in the short run, but the desire to own a home remains on firm ground and may ultimately help normalize the inventory issues.”

Three of the nation’s four regions reported value increases. Values were only down in the South, falling 0.54%, but still up 5.08% on the year. Values in the Northeast were up 0.27% and 5.22% annually. The Midwest followed, up 0.37% in January and 6.93% year to year. The West was out in front in terms of monthly and annual gains, rising 2.23% and 10.46%, respectively.

With rising values, it’s a great time to refinance. If you’re getting ready to buy, you can apply online now in order to get into a home before prices rise again. If you’d rather get started over the phone, you can speak with one of our Home Loan Experts at (800) 785-4788.

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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