Quicken Loans HPPI Shows Gap Narrowing Between Appraiser and Homeowner Opinions of Home Values

  • December 9, 2014

– National Home Price Perception Index reports a 1.56 percent gap between appraiser and homeowner opinions, Home Value Index reports 0.27 percent value increase –

• Home price changes slow dramatically – by nearly 90% – on a national scale.
• West region sees widest disparity between appraiser and homeowner opinion at 3.22%
• Homeowners in San Jose, California underestimating home value by 6% on average.
• Three quarters of metro areas show appraiser opinions higher than homeowner estimates

DETROIT, December 9, 2014 – Detroit-based Quicken Loans, the nation’s second largest retail mortgage lender, today reported that its Home Price Perception Index (HPPI) shows the opinions of homeowners and appraisers are slowly becoming more in line, on a national scale. The Home Value Index (HVI), a measure of home values based solely on appraisal data, made a slight increase from October to November 2014, when viewing the national composite.

The Quicken Loans HPPI, an unprecedented view of the housing market that reports the gap between appraiser and homeowner opinions of home values, shows that appraisers’ opinions of home values in November were 1.56 percent higher than homeowners’, according to the national composite. This makes the respective opinions closer to equilibrium compared to October 2014, when appraisers valued homes 1.58 percent higher than homeowners estimated. However, the value in November represents a larger spread than the previous year, when the difference was 1.34 percent in November 2013.

Although three-quarters of the metro areas examined had appraiser opinions higher than homeowner estimates, the difference between appraisers’ and homeowners’ opinions of value varies widely among them. In San Jose, California, appraisers value homes 6.0 percent higher than homeowners’ opinions. Conversely, in Kansas City, Missouri, appraisers’ opinions are 2.53 percent lower than homeowners’ opinions.

According to Quicken Loans Chief Economist Bob Walters: “Mortgage financing often hinges on whether the appraised value coincides with the home values agreed upon by the homebuyer and seller in the case of a home purchase, and the homeowner’s estimated value in the case of a refinance,” says Walters. “It is reassuring to see the gap between appraiser opinions and homeowner opinions narrow, and if we had to choose a side of the fence, it makes for a much smoother mortgage process if appraisers are valuing homes above homeowners’ estimates like we’re seeing, as compared to the opposite.”

The Quicken Loans HVI, an exclusive look at home values – based on appraisal data – showed that home values increased by 0.27 percent from October to November 2014 according to the national composite. Regionally, home values have made only slight movements, ranging from values falling 0.19 percent in the West to a 1.23 percent increase in Northeast.

The small increase when viewing home values nationally is not representative of Tampa, Florida; Phoenix, Arizona and Minneapolis, Minnesota which saw monthly home value drops of 6.91 percent, 6.17 percent and 7.87 percent respectively. However, the majority of metro areas had monthly home value increases, the largest of which was in Boston, Massachusetts with an increase of 3.88 percent from October to November 2014.

“The great differences in home value changes across the country show just how localized housing markets really are,” explained Walters. “The housing market is mending at a national level, but the recovery in some areas is moving more swiftly and others have been lagging. Homebuyers and sellers can make better financial decisions by educating themselves about their local housing markets.”

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About the HPPI & HVI
The Quicken Loans HPPI represents the difference between appraisers’ home value opinions and the opinions of homeowners and homebuyers. This is an unprecedented report that gives a never-before-seen analysis of how homeowners are viewing the housing market. The Quicken Loans HVI is a view of home value trends based solely on appraisal data from home purchases and mortgage refinances. This produces a wide data set and is focused on appraisals, one of the most important pieces of information to the mortgage process.

Both of these reports are created with Quicken Loans’ propriety mortgage data from the 50-state lenders’ mortgage activity across all 3,000+ counties. The indexes are examined nationally, in four geographic regions and 27 major metropolitan regions. All indexes, along with downloadable tables and graphs can be found at QuickenLoans.com/Indexes.

About Quicken Loans
Detroit-based Quicken Loans Inc. is the nation’s second largest retail home mortgage lender. The company closed a record $80 billion of volume across all 50 states in 2013. Quicken Loans generates loan production from web centers located in Detroit, Cleveland and Scottsdale, Arizona. The company also operates a centralized loan processing facility in Detroit, as well as its San Diego-based One Reverse Mortgage unit. Quicken Loans ranked “Highest in Customer Satisfaction for Primary Mortgage Origination” in the United States by J.D. Power for the past five consecutive years, 2010 – 2014, and highest in customer satisfaction among all mortgage servicers in 2014.

Quicken Loans was named among the top-30 companies on FORTUNE magazine’s annual “100 Best Companies to Work For” list for the last 11 consecutive years, ranking #5 in 2014. It has been recognized as one of Computerworld magazine’s ’100 Best Places to Work in IT’ the past ten years, ranking No. 1 in 2014, 2013, 2007, 2006 and 2005. The company moved its headquarters to downtown Detroit in 2010, and now more than 10,000 of its nearly 12,000 team members work in the city’s urban core. For more information about Quicken Loans, please visit QuickenLoans.com, on Twitter at @QLnews, and on Facebook at Facebook.com/QuickenLoans.

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