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Homeowners and appraisers drifted slightly further from agreement in December, but they’re still close together. Homeowners overestimated the value of their properties by just 0.45% to close out the year.

Meanwhile, home values were up 0.79% on the month and have gone up 5.15% annually.

Home Price Perception Index (HPPI)

Homeowners and Appraisers Remain Near Agreement to End the Year - Quicken Loans Zing Blog

Homeowners overvalued their homes by 0.45% compared to actual appraised values. Despite the fact that this is a 0.09% increase in the gap between owners and appraisers month-to-month, it remains very close compared to where the difference has been historically in this metric.

Quicken Loans Executive Vice President of Capital Markets Bill Banfield said that market conditions are very favorable for homeowners at the moment.

“Many consumers don’t think about their home’s value until they start thinking about selling it. They may not be watching their local housing market as closely as appraisers who are reviewing home sales every day – leading the owners to incorrectly estimate their home’s value,” said Banfield. “The fact of the matter is that the there are many ways a homeowner can make their equity can work for them if they have a realistic estimate of their home’s value. Tapping into home equity to consolidate high-interest debt or make home improvements are very popular options right now.”

Breaking things down regionally, homeowners in the West were closest to the actual appraised value, overvaluing their homes by just 0.34%. The South and Midwest came next, with homes overvalued by 0.42% and 0.48%, respectively. Homeowners in the Northeast trailed slightly, off by 0.58%.

In terms of data at the city level, Boston had the hottest market with appraisals coming in 2.98% higher than homeowner expectations. In fact, in December, homeowners in the area had $15,000 in equity they may not have known they could utilize. Chicago homeowners are on the opposite end, but still only overvalue their home by 1.96%. Meanwhile, homeowners in Miami were closest to appraisers, overstating their home value by just 0.17%.

Home Value Index (HVI)

Homeowners and Appraisers Remain Near Agreement to End the Year - Quicken Loans Zing Blog

Actual appraised values were up 0.79% overall on the month and have gone up 5.15% yearly.

Some metrics have shown that home value growth is starting to level off, but Banfield points out that this data shows that property values are growing at a steady pace.

“Any consumer who has read recent news about the housing market and has the impression that it is slowing to a halt should see that the HVI proves that this could not be farther from the truth,” he said. “Home value growth is now at a more normal, sustainable clip – keeping pace with inflation and wage growth more than we have seen in the past few years.”

On a regional basis, homeowners in the South saw the biggest monthly gains, up 0.54% and 4.86% on the year. This was followed by values in the Northeast, which rose 0.52% and have gone up 4.41% annually. In the West, values were up 0.38% and 5.98% yearly. The Midwest was just on the heels of the West, up 0.37% and rising 4.88% since December 2017.

If you’re interested in taking advantage of these increased home values to refinance or buy before they go up further, you can apply online with Rocket Mortgage® by Quicken Loans®. You can also speak with one of our Home Loan Experts by calling (800) 785-4788. If you have any questions, you can let us know 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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