Homeowners and appraisers were just slightly further from each other when it came to home values in the month of May. The good news is home values also rose 0.71% in the month of May.
If you’re looking to buy, it’s a great time to apply now before home prices rise further. If you want to refinance, the uptick in values makes it a great time to utilize your equity.
Home Price Perception Index (HPPI)
Homeowners and appraisers were just 0.01% further apart in home value opinions last month, with owners overvaluing their homes by just 0.34%. Other than April, this is the lowest the gap has been in three years.
Quicken Loans Executive Vice President of Capital Markets Bill Banfield said that, despite national numbers, real estate is still all about location, location, location.
“Real estate is incredibly local, from style preferences to the direction of the market – and everything in between,” said Banfield. “Our hope is that this report can help homeowners realize that national headlines don’t always apply in their community. It’s important homeowners talk to real estate or mortgage experts who have experience analyzing their community when they’re thinking of selling or utilizing their home’s equity.”
In terms of regional trends, the West was closest to actual appraised values, overvaluing their homes by just 0.13%. The South and Midwest came next, overvaluing by 0.37% and 0.41%, respectively. In the Northeast, homeowners overvalued their homes by 0.49%. In all regions, there is a significant narrowing of the gap compared to last year at the same time.
In terms of metropolitan data, only six of the cities measured have homeowner perceptions of value that are lower than actual appraisals. San Jose, California has a hot market right now. Appraisals are coming in 2.82% above homeowner estimates. Chicago is on the opposite side of the scale, off by 1.69%. Tampa, Florida homeowners are closest to appraised values, overvaluing the homes by just 0.06%.
Home Value Index (HVI)
Home values rose quite a bit in May, up 0.71% on the month and 6.56% annually.
Banfield said a lack of supply in the market continues to drive price increases.
“As we hit peak real estate season, the number of eager buyers continued to outpace the number of homes that were available, which has led to surges in appraisal values across the country and especially in the Northeast,” he said. “The only remedy is to accelerate the pace of construction to fill this need.”
The West is the only region that saw a value downturn in May, going down 1.41%. However, values in the region are still up 6.30% on the year. In the South, values have risen 6.42% on the year after being up 1.05% on the month. Midwestern home values rose 1.09% in May and have risen 5.91% since last year. Finally, values in the Northeast are flying upward rising 4.33% on the month and 8.42% since May 2017.
If you like what you see and would like to get started buying or refinancing, you can get a preapproval to purchase or a complete refinance approval online through Rocket Mortgage® by Quicken Loans. Otherwise, one of our Home Loan Experts would be happy to help you at (888) 980-6716.
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.
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.