Homeowners Overvalued Their Properties In August – 7th Consecutive Month That Gap between Homeowners’ Perception of Value Widens From Appraisers’ Opinion

  • September 8, 2015
• Homeowner estimates 2.65% higher than appraiser opinions, nationally, largest gap in over a year.
• National home values down slightly In August as compared to July, but still increased a moderate 3.24% since August 2014.
• Northeast only region of country to see year over year declines in housing prices.

DETROIT, September 8, 2015 – Quicken Loans, the nation’s second largest retail mortgage lender, today reported appraiser opinions of home values were 2.65 percent lower than homeowner estimates in August, according to the company’s national Home Price Perception Index (HPPI). Homeowner estimates of their home’s value exceeded appraiser opinions by a wider margin than in July, making August the seventh consecutive month of an increasingly wider gap between opinions.

Quicken Loans’ Home Value Index (HVI), a measure of home value changes based on actual appraisals, reported national housing values were nearly flat in August from the month prior, with the slight drop of 0.05 percent. This is less than the 0.27 percent decrease in July. Home values continued to rise annually, showing a 3.24 percent increase in value nationally compared to August 2014.

Home Price Perception Index (HPPI)

The average difference between homeowner estimates and appraised values continues to increase, according to the national HPPI. In August, the HPPI showed homeowner estimates were 2.65 percent higher than appraiser opinions. Homeowner opinions were 2.33 percent higher than appraiser opinions in July.

“While the month-to-month number is interesting to examine, it is not the single most important factor of the HPPI report. Instead, the focus should be on the trend, the direction it’s heading and how fast,” said Quicken Loans Chief Economist Bob Walters. “The perception trend of most of this year suggests homeowners may be assuming that home values have been in a steady, linear path upward. In reality, home values have remained mostly flat this year, and this false assumption may be leaving homeowners disappointed when their appraisals come in.”

Home Value Index (HVI)

Home values were practically flat in August, falling a meager 0.05 percent, according to the national HVI. Values are continuing to climb when viewed at an annual level. Nationally, home values increased 3.34 percent from August 2014.

“The Northeast region stands out in the latest HVI findings. It is the only region with a drop in home values in August. Moderating home values are a welcome sign to buyers, and could be especially enticing to those looking to purchase their first home.”

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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 a refinance 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 HPPI national composite is determined by analyzing appraisal and homeowner estimates throughout the entire country, including data points from both inside and outside the metro areas specifically called out in the above report.

The Quicken Loans HVI is the only 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 and 2015.

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 11 years, ranking No. 1 in 2015, 2014, 2013, 2007, 2006 and 2005. The company moved its headquarters to downtown Detroit in 2010, and now more than 10,000 of its 13,000 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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