June 22, 2017

Home Appraisals Continue to Fall Below Homeowners’ Expectations

According to Quicken Loans Home Price Perception Index, for the sixth month in a row, home appraisals are increasingly lower than owners’ expectations. The Home Value Index reveals that even though the gap between appraised values and owners’ expectations is widening, appraised values are actually rising each month.

What Does the Home Price Perception Index (HPPI) Say?
The HPPI is a unique report. It reflects the difference between home appraisals and homeowner expectations on both a local and national scale. It includes information for markets both inside and outside major metro areas. The most recent HPPI shows that, on a national scale, appraised values were an average of 1.93 percent lower than those expected by owners. This is an increase from 1.0 percent the previous month. The difference between the two data points varies on a citywide scale. For example, appraisals in Denver and Dallas actually exceed expectations. This is offset by perceptions in areas such as Philadelphia and Baltimore where appraised values are much lower.

What Does the Home Value Index (HVI) Say?
The HVI is also unique, as it is an indicator of home value trends based solely on data from home purchases and mortgage refinances. From April to May, home values increased 0.63% nationally. This was a 4.92% increase from May 2016.

According to Bill Banfield, Quicken Loans Executive Vice President of Capital Markets, home values are increasing due to the high demand for housing and low inventory.

As with the HPPI’s comparison of home appraisals and owner expectations, certain markets are notably different from the national average. For example, contradictory to the national trend, markets in the Northeast showed a home value loss. Home appraisals decreased 1.63 percent from the previous month.

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