Meanwhile, appraisers and homeowners were further at odds when it came to assessing home value in June as appraiser opinions fell 1.4% below homeowner estimates, a trend that’s continuing into its fifth consecutive month.
Home Value Index (HVI)
Home values were up 0.74% nationwide, bringing the annual increase from this time last year to 4.38%.
Quicken Loans Chief Economist Bob Walters said the slowing in price growth is a sign that prices are starting to settle.
“Home prices seem to be a bit frozen for the time being – validating that we are in a market that is well into the stabilization cycle,” said Walters. “The real test for home price solidity will be when inventory increases to a level of equilibrium between supply and demand.”
While there was a decline in the South of 0.09%, all other regions saw pricing gains. These were led by the West and Midwest with gains of 1.80% and 0.83% respectively. The Northeast followed with a 0.13% gain. Pricing gains are still fastest in the West where home values are up 7.63% year on year. The South comes second with a 3.22% gain. The Northeast and Midwest are at 1.40% and 1.35% on an annual basis.
Home Price Perception Index (HPPI)
June is the fifth straight month that appraiser property value opinions have been below those of homeowners. Furthermore, if you’re looking for harmony between homeowner and appraiser opinions, the trend is not your friend as the opinion gap has grown wider each month. The difference of opinion was 1.4% in June.
Walters said that much of the price confusion on the part of homeowners is likely due to the fact that price growth is slowing.
“Over the last five months we’ve seen homeowners continually value their homes higher than appraisers,” said Walters. “While each local market has a different story to tell, a large part of this perception gap is likely due to the normalization of home prices. After about a year of home values trending upward, it takes some time for many homeowners to realize home values are stabilizing in their neighborhoods.”
The West is a particularly noteworthy region as homeowner estimates exactly matched appraiser value opinions. This was offset by the Midwest, where homeowners rated their homes 2.14% more valuable than appraisers did. The same trend was seen in the South and Northeast with gaps of 0.24% and 0.27%, respectively.
Looking at the metro level, homeowners in San Jose, CA undervalued their homes by 6.11%. Meanwhile, homeowners in Kansas City, MO had the most overvalued estimates of their property value, coming in with a 3.19% difference. Minneapolis came in with estimates that were the closest to par, rating their home value just 0.04% higher than appraisers.
The Home Value and Home Price Perception Indexes are released on the second Tuesday of each month on the Quicken Loans Press Room.
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.