Homeowner perceptions of value compared to appraisers’ remained exactly the same as in July. Appraisal values came in 0.28% below homeowner estimates, but the groups are very close to agreement in comparison to the past history of this metric.
Meanwhile, home values were up 1.08% on the month and have risen 5.79% on the year.
Home Price Perception Index (HPPI)
At the beginning of the refinance process, homeowners tell their lender what they think their home is worth. As the nation’s largest mortgage lender 1, Quicken Loans is able to gather a lot of these homeowner estimates. By comparing the actual appraisal value to these estimates, you get a chance to see how realistic homeowner expectations of value are.
Quicken Loans Executive Vice President of Capital Markets Bill Banfield said that location seems to be playing a big role in perceptions of home value.
“The variance in the HPPI across the country perfectly illustrates just how localized the real estate market is and how different it can be from one city to the next,” said Banfield. “It’s important for homeowners to look at their local housing market, and their home, objectively before estimating its value. Real estate experts can help them properly estimate their home’s value to make the process easier – whether they are selling or refinancing.”
When we turn to the collected data, we see that homeowners in the West were closest to actual appraised value, overvaluing homes by just 0.14%. Meanwhile, in the South, homeowners were off by 0.27%. Next was the Midwest with homeowners’ overestimated value by 0.33%. The Northeast region brought up the rear, with a 0.41% difference of opinion between the appraisal and estimate.
Drilling down a little deeper, at the metropolitan level, Boston had the highest value to homes in relation to homeowner estimates. Appraisals came in 2.88% above homeowner estimates in the area. On the other side of the spectrum is Chicago, where homeowners inflated their property value estimates by 1.74%.
Home Value Index (HVI)
As mentioned above, home values themselves were up 1.08% in August and have gone up 5.79% annually.
Banfield blames the price increases on seasonality in the purchase market.
“With the summer winding down, there were less ‘for sale’ signs on lawns across America, which left the buyers competing over these available houses and driving the prices up,” Banfield said. “We are all watching closely to see when more homes will be put up for sale, balancing the markets, because the demand for housing isn’t slowing down.”
Homeowners in the West have seen their home values increased by 2.61% in August. Values increased 8.01% annually. Following next in terms of monthly gains is the South, up 0.58% and 5.61% on the year. The Northeast was up 0.4% since August 2018 and 3.78% annually. Finally, the Midwest saw a 0.09% increase and is up 3.97% annually.
If you’re looking to refinance, values are trending up in many areas of the country. It’s a great time to take cash out if it meets your financial goals. If you’re looking to buy, you can purchase now before housing prices increase.
If you would like to get started, you can apply online or by speaking with one of our Home Loan Experts at (800) 785-4788.
The Home Price Perception and Home Value Indexes are released on the second Tuesday of each month on the Quicken Loans Press Room.
1Based on Quicken Loans data in comparison to public data records.
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.