Quicken Loans Study Shows Appraisal Values Lag Half a Percent Behind Homeowner Estimates

  • September 10, 2019

• Quicken Loans’ National HPPI shows appraised values 0.64% lower than homeowners estimated in August

• Home values rose 0.95% nationally in August, and posted a 4.64% year-over-year increase, according to the Quicken Loans HVI

DETROIT, September 10, 2019 – Homeowners across the country have a good idea what their home is worth, with the average home appraisal in August being only 0.64 percent lower than what the owner expected, according to Quicken Loans’ National Home Price Perception Index (HPPI). While the gap between the owner’s estimate and the appraisal widened a bit from the previous month, and is more than double what it was in August 2018, it is still within the range that shouldn’t cause problems in the mortgage process for most buyers or refinancing homeowners.

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The HPPI at a local level is even more promising. The majority of metro areas measured had average appraisal values higher than what the owner estimated. Of the areas where the appraised valued was lower than expected, only three of them had an average appraisal value more than 1% lower than the owner’s estimate. The HPPI was strongest in Boston, which had an average appraisal value 2.05% higher than expected. Chicago, yet again, lagged all metro areas with the average appraisal 1.77% lower than the homeowner’s estimate.

“Homeowner perceptions have remained in a relatively tight band, with less than a percent gap between expectations and actual appraisal values, for the last two years. This is a good sign that homeowners have kept their finger on the pulse of their local housing market as home values continued to rise,” said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “This is a great news for those who haven’t already tapped their growing home equity. Based on the report, they are likely to have a good estimate of their home’s value and, as a result, have a smooth process when it comes time for the appraisal in the mortgage process.”

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The Quicken Loans Home Value Index (HVI), which measures home value fluctuation based on appraisals, showed both monthly and annual increases in appraised values at a national level. There was a healthy 0.95% growth in home values from July to August, and a strong 4.64% year-over-year increase.

When viewed at a regional level, three out of the four regions measured showed rising home values from July to August. The Northeast was the outlier, with a 0.36% dip in average appraisal value. The largest monthly gain was in the South, which had a 1.09% bump in home values. All four regions had gainful increases in home values when measures at an annual level. The Midwest led the nation in home value increases at 5.44%. The West trailed the country, but still had a worthwhile 1.93% increase in appraised values.

“Home values continue to reach levels never before seen. As the growth trend persists, the question everyone considers is whether we will have affordability issues,” said Banfield “The good news is that the dip in interest rates, around 3-year lows, has prevented buyers from needing to adjust their budget and kept home sales strong.”

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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 t`hat 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.

The HPPI and HVI are released on the second Tuesday of every month. Both of the 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 largest home mortgage lender. The company closed nearly half a trillion dollars of mortgage volume across all 50 states from 2013 through 2018. Quicken Loans moved its headquarters to downtown Detroit in 2010. Today, Quicken Loans and its Family of Companies employ more than 17,000 full-time team members in Detroit’s urban core. The company generates loan production from web centers located in Detroit, Cleveland and Phoenix. Quicken Loans 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 the country for customer satisfaction for primary mortgage origination by J.D. Power for the past nine consecutive years, 2010 – 2018, and also ranked highest in the country for customer satisfaction among all mortgage servicers the past six consecutive years, 2014 – 2019.

Quicken Loans was once again named to FORTUNE magazine’s “100 Best Companies to Work For” list in 2019 and has been included in the magazine’s top 1/3rd of companies named to the list for the past 16 consecutive years. In addition, Essence Magazine named Quicken Loans “#1 Place to Work in the Country for African Americans.”

For more information and company news visit QuickenLoans.com/press-room.

Additional graphics are available below.

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