The gap between appraiser and homeowner opinions of home value widened slightly in March, with appraiser opinions being 0.40% lower than those of homeowners. Meanwhile, home values were down 0.56% for the month.

Homeowners Overestimate Home Value, Values Decline in March - Quicken Loans Zing Blog

Home Price Perception Index (HPPI)

This month’s HPPI showed that the gap between appraiser and homeowner opinions of home value had grown slightly larger with homeowners overvaluing their home by 0.40%. The difference had been 0.13% in February.

Having a good understanding of the value of your home is important when refinancing or selling your property. A mortgage company will only loan up to your home’s appraised value in a sale. The appraisal can also affect whether you can refinance and the types of terms you can get.

Quicken Loans Chief Economist Bob Walters said it was good to see appraiser and homeowner opinions of value so close.

“While the national HPPI shows appraiser opinions trailing those of homeowners, it is encouraging to see the gap at such a narrow margin,” said Walters. “Although home affordability for buyers can begin to be a problem in a seller’s market, which we are seeing in many of the country’s metro areas, homeowners in a majority of the nation’s largest markets can take solace in the fact that their home may have more equity than they realize.”

A key difference in this month’s report occurred in Tampa, where homeowners rated values 0.11% higher than appraisers. Appraisers had rated home values 0.10% higher than homeowners in February.

Despite this change, appraiser value opinions are still higher than those of homeowners in 17 of the 27 metro areas surveyed.

Zooming out to the regional level, appraisers rated properties 0.10% higher than homeowners in the West. The opposite was true in the South, Northeast and Midwest, with the gaps coming in at 0.41%, 0.66% and 0.67%, respectively.

Homeowners Overestimate Home Value, Values Decline in March - Quicken Loans Zing Blog

Home Value Index (HVI)

Home values fell 0.56% in the month of March. Prices in all four regions fell slightly. Despite this, prices were still 6.42% higher than they were in March of last year. The year-over-year difference is down from 8.46% in February.

Prices in the South and West declined 0.30% and 0.55% in March, respectively. The declines were 0.95% and 1.31% in the Midwest and Northeast.

Walters said home values were decreasing, but it would be interesting to see how things developed throughout the spring and summer.

“Despite negative housing trends garnering attention, home values nationally are still displaying healthy gains over the long term,” said Walters. “The market is in a lull right now, and all eyes are focused on homeowners as they decide whether to list their home. The upcoming peak real estate season could set the course for the market and push home values positively or negatively in a big way.”

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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