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Couple smiling and signing documents for their new home with their real estate agent.

Homeowners and appraisers came closer to agreement on home values in the month of October. Appraisals were just 0.45% below homeowner expectations last month.

Home values saw a slight dip, but they’ve still risen 7.07% for the year.

Home Price Perception Index (HPPI)

November: Perception of Home Values Across America, Based on the National Quicken Loans Home Price Perception Index (HPPI).

 

The difference of opinion on appraised values narrowed by a margin of 0.04% in October as the average appraisal underperformed relative to homeowner estimates by 0.45%. This has been narrowing for each of the last 3 months.

In general, there’s been a trend toward homeowner and appraiser harmony across the country. In all of the metropolitan areas surveyed, the difference between estimates and actual appraised values was less than 2%.

“While most areas in the (U.S.) have not hit equilibrium for home price perception, there is stability in much of the country,” said Bill Banfield, Executive Vice President of Capital Market for Quicken Loans®. “With such a small difference between appraised values and estimated values, homeowners are less likely to run into snags in the mortgage process when refinancing or buying a new home.”

Homeowners in the West were closest to equilibrium with home values coming in just 0.39% under homeowner expectations. The Northeast was just behind, with a 0.4% difference. In the South and Midwest, homeowners trailed, but not by much. Homes were overvalued by 0.47% and 0.52%, respectively.

Charlotte, North Carolina has the hottest housing market right now, with appraisals coming in 1.4% above homeowner expectations. Meanwhile, Windy City homeowners are on the other end of the spectrum, overvaluing their homes by 1.64%. Homeowners in Kansas City, Missouri are near-total agreement with appraisers at this point. Appraisals are coming in 0.01% higher than expectations.

Home Value Index (HVI)

November: Homeowner Estimates and Appraiser Opinions of Home Values.

Home values fell 0.04% last month. However, they’ve still gone up 7.07% since October of last year, which is more than healthy price appreciation for sellers.

Banfield wasn’t phased by the slight slowing of price appreciation.

“The leveling off we saw in October is actually a welcome sign, especially to first-time home buyers who are focused on affordability,” said Banfield. “An ideal economic equilibrium would be steadily increasing home values that keep pace with inflation and wage growth. This year’s lower interest rates and the moderating level of home prices has improved affordability despite low a low supply of homes for sale.”

Taking a look at the data on a regional basis, it wasn’t a great month for homeowners in the West as they saw their home values drop 0.75%. However, these are still up 6.07% on the year in the region. Homes in the Midwest saw values dip 0.64%, but they’ve risen 5.6% annually. In the South, values fell 0.16%, but they’ve risen 3.77% for the year. Finally, the Northeast was the only region to eke out a gain, going up 0.08% and 5.11% since October 2018.

Whether you’re in the market to buy or refinance, there are good things to take out of this report today. You can get started online with Rocket Mortgage® by Quicken Loans or give one of our Home Loan Experts a call 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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