Quicken Loans Survey Shows Appraisals Are Lower Than Homeowner Estimates


Homeowners overestimated their property values by 1.69% in February. This is trending in the wrong direction because the gap is up 1.47%. This is a trend that’s been ongoing since February 2015.
The good news is home values were up 0.55% over last month and 2.95% over the same time last year.
Home Price Perception Index (HPPI)

Appraisal values are lower than homeowners thought, with the gap between homeowners and appraisers widening to 1.69%. That said, they’re still higher than homeowner estimates in just over half of the 27 metro areas measured.
Quicken Loans Vice President of Capital Markets Bill Banfield said that this data really helps homeowners have a clearer understanding of home values, so there are no surprises in the mortgage process.
“Quicken Loans is in a unique position, with access to two valuable data points. Homeowners tell us what they think their home is worth at the beginning of the mortgage process, then we compare that with the appraiser’s opinion of value,” said Banfield. “We hope consumers will take advantage of this information, seeing how their neighbors are perceiving their housing market, so they can better understand their own home’s value.”

The perception gap was widest in the Midwest where homeowners overvalued their homes by 1.85%. The Northeast was close on its heels, coming in with a gap of 1.8%, followed by the South at 1.68%. The West, which is home to many hot housing markets, was closest to agreement with appraisers, overestimating values by just 1.46%.
Denver is the hottest market around right now. Homeowner estimates come in 2.7% lower than those of appraisers. Philadelphia continues to hold its place at the other end of the spectrum, with appraisals coming in 3.09% lower than homeowner estimates. Homeowners in Miami are closest to par when it comes to values in their homes, overvaluing them by just 0.05%.
Home Value Index (HVI)

Homeowners and appraisers may be in disagreement when it comes to values, but this doesn’t mean that values aren’t rising overall, up 0.55% over January and 2.95% over the last year.
Banfield pointed to one market condition in particular to explain why prices are generally rising across the country.
“Low levels of home inventory persists as the main driver of home value growth,” he said. “There are still plenty of interested buyers vying for a slim amount of homes for sale – pushing prices higher. Home values are likely to move higher in the Midwest as the spring buying season approaches, unless the number of homes available increases.”
Turning to the regional data, the West leads the way in both monthly and yearly value gains, up 1.31% and 4.45% respectively. The South also had a good February, up 0.35% and 4.12% on the year. Home prices in the Midwest saw a 0.23% increase and are up a modest 0.47% annually. The Northeast is up 0.13% on the month with a 1.35% annual increase.
The housing market looks pretty great right now. If you’re ready to buy or refinance, check out your options online through Rocket Mortgage or give us a call at (888) 980-6716.
The Quicken Loans Home Price Perception and Home Value Indexes are released on the second Tuesday of each month on the Quicken Loans Press Room .
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