Home values were up in August, rising 1% on the month and 4.64% compared to the same time a year ago.
Meanwhile, homeowners and appraisers found themselves in basically the same spot they were in July.
Home Price Perception Index (HPPI)
Appraised values came in 0.64% lower than the best guesses of homeowners in August, according to Quicken Loans® data. The difference is just 0.01% higher than it was in July.
Quicken Loans Executive Vice President of Capital Markets Bill Banfield said homeowners seem to have a fairly good idea of what their homes are worth.
“Homeowner perceptions have remained in a relatively tight band, with less than a percent gap between expectations and actual appraisal values, for the last two years. This is a good sign that homeowners have kept their finger on the pulse of their local housing market as home values continued to rise,” he said. “This is a great news for those who haven’t already tapped their growing home equity. Based on the report, they are likely to have a good estimate of their home’s value and, as a result, have a smooth process when it comes time for the appraisal in the mortgage process.”
Diving into the regional data, in the Midwest homeowners overestimated the value of their homes by 0.59%, followed by homeowners in the West at a difference of 0.6%. Homeowners in the Northeast and South also have guesses that are bunched together, with inflated property value estimates coming in 0.66% and 0.67% higher than appraised values, respectively.
In terms of metropolitan values, in a majority of the cities surveyed, appraised values came in higher than homeowner expectations. Boston has the hottest housing market with values coming in 2.05% higher than homeowners expect. At the other end of the spectrum, Chicago homeowners continue to lag, with estimates 1.77% higher than appraisals. Kansas City, Missouri and Sacramento, California both were closest to actual appraised values– 0.08% higher than homeowners were expecting.
Home Value Index (HVI)
Home values are up nationwide, having risen 0.95% in August and seeing a 4.64% year-over-year increase.
The growth in values is good for those looking to refinance, but what about people in the market to buy homes?
“Home values continue to reach levels never before seen. As the growth trend persists, the question everyone considers is whether we will have affordability issues,” said Banfield. “The good news is that the dip in interest rates, around 3-year lows, has prevented buyers from needing to adjust their budget and kept home sales strong.”
In the Northeast values were down 0.36% on the month, but they’ve gone up 4.32% on the year. All other regions saw home values rise. The Midwest was up 0.07% in August and has risen 5.44% year-over-year. Meanwhile, values in the West were up 0.35% in August and have increased 1.93% from the same time a year ago. Finally, in the South, home values spiked 1.09% in August and are up 4.03% year-to-year.
If you’re in the market to refinance, it’s a great time to take advantage of existing equity. For those looking to buy, it’s a good idea to get into a home now before values go up further. If you’re ready, you can apply online or speak with one of our Home Loan Experts 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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