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Estimations of home value came in 0.29% higher than actual appraised values in September, around the same difference of opinion we saw in August.

Meanwhile, the home values themselves were up 0.35% last month and have risen 5.69% on the year. If you’re looking to buy or refinance, you realize these market details are important, so let’s jump in.

Home Price Perception Index (HPPI)

Perceptions of Home Value Steady at End of Summer - Quicken Loans Zing Blog

The gap between appraisal valuations and homeowner estimates was just slightly higher, with appraisal values coming in 0.29% below estimates compared with a 0.28% difference in August. This is a huge improvement from the same time a year ago when homeowners were overestimating the value of their homes by 1.14%.

Quicken Loans Executive Vice President of Capital Markets Bill Banfield said the narrowing of this gap means good things for clients.

“A wide gap between the estimated home value and the appraised value can cause a mortgage to be reworked, or in some cases, scrapped altogether,” said Banfield. “All the more reason for homeowners to be realistic when their mortgage banker asks them what they think their home is worth when they start the financing process. Our hope is that the HPPI data on past neighbor transactions can help a homeowner better estimate the value of their home in order to set their financing up for success.”

Taking a look at the data at a regional level, homeowners in the West were closest to actual appraised values, overvaluing their homes by just 0.12%. The South and Midwest followed at 0.31% and 0.35%, respectively. Homeowners in the Northeast bring up the rear, but still only overestimated property value by 0.38%.

Turning to metro areas, Boston homeowners currently have the most undervalued homes as their housing market is as hot as their baseball team. In Boston, appraisals are coming in 2.95% higher than homeowner estimates. Meanwhile, homeowners in Chicago are at the other end of the spectrum, overestimating home value by 1.95%. Homeowners in the Motor City are closest to agreement with appraisers: In Detroit, the average appraisal came in just 0.16% higher than homeowner estimates in September.

Home Value Index (HVI)

Perceptions of Home Value Steady at End of Summer - Quicken Loans Zing Blog

Home values were up 0.35% in September and 5.69% annually. The pace of year-over-year growth has slowed just slightly from 5.79% last month.

Banfield said a slowdown in price growth is something home buyers and owners alike should begin to anticipate.

“Rapid price increases that have spanned more than half a decade have started to affect affordability as average wage increases struggle to keep up,” said Banfield. “While home values are still rising, especially with solid annual jumps, a slowdown in monthly growth is expected to allow the market balance with the more moderate inflation.”

In terms of regional price changes, homeowners in the West saw their home values decrease 0.56%, but they’ve still risen 6.36% annually. All other regions had increases. The South was up 0.03% in September and 7.06% on the year. Meanwhile, values in the Midwest were up 0.65%, and 3.97% on an annual basis. Finally, the Northeast saw the biggest growth, up 1.33% monthly. It’s up 4.22% from the same time a year ago.

If you’re looking to buy or refinance, now is an excellent time to get started before interest rates rise further. You can apply online or give one of our Home Loan Experts a call at (800) 785-4788. If you have any questions, you can share them with us in the comments below.

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.

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