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Homeowners and appraisers narrowed the gap on their opinions of home value in April. They’re now closer on values than they’ve been in more than three years.

Home values did dip slightly, down 0.05% in March, but still rising 6.47% on the year.

Home Price Perception Index (HPPI)

Homeowner perceptions of home value came in at just 0.33% above actual appraisal values, according to the most recent Quicken Loans data. This is an improvement from 0.36% in March.

Quicken Loans Executive Vice President of Capital Markets Bill Banfield said this is a good development to see because it makes your mortgage process so much smoother.

“The appraisal is one of the most important, although sometimes least predictable, parts of the mortgage process,” said Banfield. “The Home Price Perception Index is a way to illustrate the differences of opinion, and these differences affect everything from the type of mortgage a borrower can get to the expectations a seller has about the proceeds available upon sale of their home.”

Taking a look at regional data, the West is nearly in total alignment with appraisers on home values overestimating by just 0.08%. In the South, homeowners overestimated by 0.38%. The Northeast is at 0.41% overestimated and 0.47% high in the Midwest.

Turning to the metropolitan level, San Jose, California has the most undervalued housing market, with appraisals coming in 2.75% higher than homeowner estimates. On the other side of the spectrum, Chicago homeowners are overvaluing their homes by 1.68%. Homeowners in Atlanta are nearest to equilibrium with appraisers, undervaluing homes by 0.07%.

There are some general trends that are pointing in the right direction. Only five of 27 metropolitan markets measured are overvaluing their homes based on appraisal values.

Home Value Index (HVI)

Homeowners and Appraisers Closer to Agreement Than at Any Time in the Last 3 Years - Quicken Loans Zing Blog

Looking at the values themselves, they were down just slightly last month, falling 0.05%. They’re still up 6.47% on the year.

Banfield said that it’s been really important to keep an eye on home affordability.

“The skyrocketing home values in the West is a trend with no end in sight. Until home building pace picks up, in combination with more existing homes being listed for sale, affordability will continue to wane,” Banfield said. “The other regions of the country are showing annual price gains as well but at a more moderate pace. Time will tell if the slightly higher interest rates in 2018 start to slow demand or if the inventory shortage ends up being a larger contributor to price changes.”

Breaking things down regionally, the only region that actually saw values drop was the Northeast, which is down 1.24% for the month of April but up 2.22% on the year. The Midwest was up 0.93%, up 5.81% on the year. It was followed by the West, up 0.53% on the month and 9.44% on the year. Finally, the South was up 0.32% in April and 5.86% annually.

If you’re looking to buy this home buying season, it’s a great time to think about getting started because values have generally been going up and you may want to get in before they go higher. If you’re looking to refinance, higher values mean more equity and more room to accomplish your financial goals.

You can get started online by visiting Rocket Mortgage by Quicken Loans or calling (800) 785-4788 to speak with one of our knowledgeable Home Loan Experts. If you have any questions for us, you can feel free to leave them in the comments below.

The 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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