Average Appraisal Is Half of a Percent Less Than Expected

  • November 12, 2019

• Quicken Loans’ National HPPI shows appraised values 0.45% lower than homeowners estimated in October

• Home values dipped -0.04% nationally in October, but posted a 7.07% year-over-year increase, according to the Quicken Loans HVI

DETROIT, November 12, 2019 – Home value perceptions have remained steady, with owner expectations lagging appraiser opinions by about a half percent for the past few months. In October, appraisals were an average of 0.45% lower than what homeowners expected, according to the National Home Price Perception Index (HPPI). The data also show that the slow march toward perfect balance continued. The gap between the average owner estimate and appraiser opinion narrowed each of the last three months.

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There is a spectrum of home value perception across the country, but most homeowners are not likely to be shocked by their appraisal. The appraisals in all the metro areas measured were less than 2% lower, or higher, than expected. They range from appraisals that were an average of 1.64% lower than expected in Chicago, to appraisals an average of 1.40% higher than what the homeowners estimated.

“While most areas in the have not hit equilibrium for home price perception, there is stability in much of the country,” said Bill Banfield, Executive Vice President of Capital Market for Quicken Loans. “With such a small difference between appraised values and estimated values, homeowners are less likely to run into snags in the mortgage process when refinancing or buying a new home.”

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Homeowners are keeping pace of home values even as they rise, as shown by the Quicken Loans Home Value Index (HVI), the only measure of home values based exclusively on home appraisals. Despite home values being essentially stagnant, dipping -0.04% from September to October, the annual measure shows appraisals rose 7.07% since October 2018.

At a regional level, the West made the largest monthly drop, falling -0.75% since September, but rising 6.07% year-over year. The Northeast was the only area with a bump in value, with appraisals rising a nascent +0.08% in October. At an annual level, the South lagged the country with a 3.77% increase year-over-year.

“The leveling off we saw in October is actually a welcome sign, especially to first time homebuyers who are focused on affordability,” said Banfield. “An ideal economic equilibrium would be steadily increasing home values that keep pace with inflation and wage growth. This year’s lower interest rates and the moderating level of home prices has improved affordability despite low a low supply of homes for sale.”

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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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