Homeowners and Appraisers Remain Close to Agreement in November

Homeowners overestimated the value of their homes by 0.36% in November, according to Quicken Loans data. Despite the slight upturn from 0.28% in October, homeowners and appraisers are still close when it comes to valuing homes.

Meanwhile, home values themselves increased 0.53% nationally last month, and they have risen 5.01% annually.

Home Price Perception Index (HPPI)

Homeowners were just a little bit further apart from actual appraised values in their estimates last month. The difference between homeowner and appraiser opinions was 0.36% in November, as opposed to 0.28% in October.

The gap between estimate and appraisal has been under 0.5% since March. Many housing markets are even seeing home values coming in above homeowner estimates.

Quicken Loans Executive Vice President of Capital Markets Bill Banfield said that the data points to a healthy housing market.

“Homeowner perception staying at a steady level is a sign of a sturdy housing market,” Banfield said. “Some homeowners may not be as aware of home value changes as the professionals who study the real estate market every day, so any large, sudden, spikes or drops in home values, are often reflected by a swift widening gap in the HPPI.”

Homeowners in the West were closest to actual appraised values. They overvalued their homes by just 0.23%. In the South, the difference was 0.33%. The Northeast and the Midwest trailed at 0.40% and 0.48%, respectively.

Further breaking it down into regional data, Boston continues to be the hottest market with appraisals coming in 2.92% higher than homeowner estimates. Chicago is the only market where appraisals trail homeowner estimates by more than 2% at 2.11%. Homeowners in New York City are closest to the actual appraisal opinions, with appraisals coming in just 0.1% higher than homeowner opinions.

Home Value Index (HVI)

Homeowners got some good news in terms of values themselves in November. Appraised values rose by 0.53% and are up 5.01% on the year.

Banfield actually thinks this lower price growth helps the housing market and home buyers in general.

“With interest rates higher than they were at this time last year, and signs pointing to this trend continuing, it’s good to see appraisal values keeping moderate annual growth – avoiding possible affordability problems,” he said. “While homeowners like to celebrate increasing equity, these restrained gains, keeping closer pace with inflation and wage growth, is much healthier for the economy.”

Diving into the regional data, the South had the biggest monthly gain, up 0.52% and 4.7% annually. The Northeast was right behind, up 0.51% and increasing just 3.66% on the year. The West was next, up 0.42% on the month and 6.16% on the year. The Midwest brought up the rear in terms of the monthly gains, up 0.41% monthly and 4.53% on a yearly basis.

If you like what you see and are interested in buying a home or refinancing your current one, you can apply online today or give one of our Home Loan Experts a call at (800) 785-4788.

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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