Quicken Loans Study Shows a Greater Divide Forming Between Appraiser and Homeowner Perceptions in April

  • May 12, 2015

– Home values in April increase after decrease in March –

• Appraiser opinions of values remained higher than homeowner estimates in 63% of the metro areas measured.
• Home values show small monthly increase nationally and in all regions, while posting modest yearly increases.

DETROIT, May 12, 2015 – Detroit-based Quicken Loans, the nation’s second largest retail mortgage lender, today reported appraiser home value opinions continued to fall below homeowner estimates in April, according to the company’s Home Price Perception Index (HPPI). The national index shows appraiser estimates 0.69 percent below homeowner estimates, on average.

The national Quicken Loans Home Value Index (HVI) reports home values increased 0.28 percent in April, after a slight dip in March.

Home Price Perception Index (HPPI)

The trend of a widening gap between appraiser and homeowner opinions continued in April, according to the Quicken Loans study of home value perceptions. The HPPI showed appraiser opinions were 0.69 percent below homeowner estimates. The index dipped compared to March when appraiser opinions were 0.40 percent below homeowner estimates. April marks the third consecutive month of appraiser opinions falling below homeowner estimates.

“While it is not surprising to most appraisers that homeowners are overestimating their home’s value on a national average, we should always make note of direction the trend is heading to help set expectations for homebuyers and those looking to refinance,” said Quicken Loans Chief Economist Bob Walters. “There is nothing more disappointing to a homeowner than learning that the value of their home is less than they expected. This index is an important tool for lenders and homeowners alike as they set reasonable expectations for obtaining a mortgage.”

Home Value Index (HVI)

The national HVI, a measure of home values based solely on appraisals, increased in April after a drop in March, gaining 0.28 percent nationally. Values also continued their strong year-over-year increases, rising 5.54 percent since April 2014 on a national level. The West region had the largest annual gain of 6.58 percent on a yearly basis, while the Northeast posted the smallest increase with a 2.39 percent annual gain.

“Home values increased in April, however it was not enough to cancel out March’s decline,” Walters continued. “Homeowners that are still underwater are looking for large increases, but those increases can in fact price homebuyers out of the market. Home affordability could become a worry if home values increases get too far ahead of the modest pace of wage increases, which are sitting at about 2 percent annually.”

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About the HPPI & HVI

The Quicken Loans HPPI represents the difference between appraisers’ and homeowners’ opinions of home values. The index compares the estimate that the homeowner supplies on the mortgage application to the appraisal that is performed later in the mortgage process. 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 the HPPI is reported for 27 major metropolitan areas. 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 $140 billion of mortgage volume across all 50 states in 2013-2014. 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 12 consecutive years, ranking No. 12 in 2015. 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.

Additional graphics are available below.

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