The margin between homeowner estimates and the actual appraised value of homes narrowed by 0.17% in December. Appraisers now value homes just 0.50% lower than homeowner estimates.
Home values also rose 0.65% nationally in December for a 6.17% increase on the year.
Home Price Perception Index (HPPI)
The 0.50% gap between homeowner hypotheses and actual appraisal values is the lowest it’s been since March 2015. It decreased from 0.67% in November. This also represents the seventh straight month the gap has thinned.
Quicken Loans Executive Vice President of Capital Markets Bill Banfield said that rising values in certain regions of the country are having a positive effect on this metric.
“Appraisers and real estate professionals evaluate their local housing markets daily. Homeowners, on the other hand, may only think about their housing market when they see ‘for sale’ signs hit front yards in the spring or when they think about accessing their equity,” said Banfield. “This is reflected in the HPPI. The housing markets that are rising quickly, like those in the West, are having appraisal values increasing above owner estimates because owners don’t realize just how quickly those markets are advancing.”
Turning to regional data, homeowners in the West were closest to the actual appraised value, overestimating by just 0.24%. The South was next with an over-estimation of 0.53%. The Northeast and Midwest bring up the rear, overvaluing their properties by 0.68% and 0.71%, respectively.
Turning to individual cities, homeowners in Dallas have the most undervalued properties. Appraisals are 3.17% higher than homeowner estimates. On the opposite end, Cleveland homeowners are overvaluing homes by 2.09%. New Yorkers are closest to harmony with appraisers, overvaluing properties by just 0.15%.
Home Value Index (HVI)
Home values were up 0.65% in December based on appraisal data. It’s up 6.17% from December of last year.
Banfield said increased equity could give homeowners more financial options heading into the new year.
“Homeowners received the gift of added equity this holiday season,” said Banfield. “With several years of growth, owners may have more equity than they realize. Many consumers use the tax season at the beginning of the year to reevaluate their entire financial life. It also provides a good opportunity for them to consider how best to take advantage of their equity while mortgage interest rates and borrowing costs are still near record lows.”
The only region to see a dip in values on the month was the Northeast, down 0.21%. The Midwest had a small gain, up 0.03% on the month. The South and West led the charge, up 0.39% and 0.55%, respectively.
If you’re looking to refinance, now is a great time. You have increasing equity across many areas of the country and low rates. If you’re looking to buy, we’re in an upward trend in terms of values. If you’re ready, you should apply now while prices are at their current levels.
If you’d like to get started online, you can do so through Rocket Mortgage. If the phone suits you better, feel free to contact 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 at the Quicken Loans Press Room.
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