Homeowners are getting a little bit more realistic about their home values. Appraiser opinions were 1.95% higher in April than those of homeowners compared to 2.17% lower in March, according to data released today by Quicken Loans.
Meanwhile, home values are down 0.66% since March. Still, the annual appreciation rate is strong, up 3.79%.
Home Price Perception Index (HPPI)
Homeowner and appraiser price perceptions are getting closer together as homeowners closed the gap between themselves and appraisers by 0.22% so that they’re off by just 1.95%.
If potential buyers and homeowners have an accurate idea of local home value, it makes both purchases and refinances easier. Buyers and sellers can make solid deals and homeowners know how much equity they have when it comes time to refinance.
Quicken Loans Chief Economist Bob Walters said that this move toward greater price agreement was a good thing for homeowners.
“The HPPI is in a healthy trend, nationally,” said Walters. “While everyone wants their appraisals to come back showing more equity than anticipated, like some homeowners in the West, the discrepancy we are seeing now won’t likely derail a mortgage transaction.”
Turning to regional data, homeowners have the most realistic opinions of home value in the West. Homeowners are high by 1.66%. In the South, homeowners overestimate value by 1.95%. Meanwhile, Midwestern homeowners are 2.11% to the high side and Northeastern homeowners were 2.13% high.
At the city level, San Jose, Calif., homeowners have the most underestimated home values at 3.56% below appraiser opinion. Philadelphia definitely isn’t the city of appraisal love as homeowners there are on the other side of the spectrum, overestimating their values by 3.46%. Homeowners in San Diego are essentially right on the button, underestimating their values by just 0.01%.
Home Value Index (HVI)
Home values were down 0.66%, but values were still up 3.79% on the year in April.
Walters said we’re in a Goldilocks zone in terms of annual appreciation at the moment. Not too fast and not too slow, but just right.
“The steady annual increase in home values shows sustainable growth and an improving economy,” said Walters. “We always look for gains to be similar to inflationary growth while avoiding the hikes that could lead to bubble fears. We are currently in that range, which should come as a more comforting sign to many homeowners.”
Values in the West were down 1.72% in April. Values increased in all other regions, led by the Midwest, up 0.57%. The Northeast was right behind at 0.55% and the South was at 0.34%.
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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