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Homeowners continue to guess on the high side when it comes to the value of their homes, according to data released on September 14 by Quicken Loans. However, the 1.56% difference between homeowner estimates and appraiser opinions shows that the gap narrowed from July to August.

Meanwhile, home values were up quite a bit, rising 1.73% in August.

Home Price Perception Index (HPPI)

Homeowners Continue to Overestimate Home Worth, but Values Jump - Quicken Loans Zing Blog

Appraised values were 1.56% lower than owner estimates in August. The difference is getting smaller compared to July, when homeowners were overvaluing their properties by 1.69%.

In almost half the cities surveyed, appraiser opinions were actually higher than homeowner estimates in August, which is good because it means homeowners have more equity than they think they do. But in areas of the country where the homeowner estimate is higher, the gap can cause problems for people looking to refinance.

“While a one and a half percent difference may not seem like a big disparity of home value opinions, the gap could cause problems, especially in areas with an even wider difference,” said Quicken Loans Chief Economist Bob Walters. “In some portions of the Midwest, where appraisals are averaging 2 – 3 percent less than what was expected, this will often lead to restructuring a refinance or the homeowner needing to bring a few more thousand dollars to the closing table.”

Home Value Index (HVI)

Homeowners Continue to Overestimate Home Worth, but Values Jump - Quicken Loans Zing Blog

Home values were up 1.73% in August and are up 8.13% on the year. It’s definitely a sellers’ market out there right now. Values varied widely regionally with the South up just 0.03%, while the West was up 1.88%.

“Competition in the housing market has been especially hot this summer, causing home values to climb,” said Walters. “This spike can concern some buyers, as the increases are outpacing inflation and wage increases, leading to affordability problems in some of the hottest markets. However, the pace of home value increases will likely slow as we move into the colder months and there is more balance between buyers and sellers.”

With values increasing, it’s a great time to refinance. If you’re in the market to buy, you may as well do so now in case prices go up more. Check out Rocket MortgageSM by Quicken Loans to take the next step today.

The Quicken Loans Home Price Perception and Home Value Indexes are released on the second Tuesday of each month in the Quicken Loans Press Room.

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