Home Values See Their Largest Monthly Gain In 5 Years

Home values were up 2.15% across the country in September. This gain hasn’t been seen since 2014.

The higher home values may have played a significant role in homeowner expectations of value coming more in line with actual appraised values with estimates coming in just 0.49% higher than appraisals in September.

Home Price Perception Index (HPPI)

The appraised values in more than 55% of the metro areas looked at in Quicken Loans’ survey were higher than homeowners anticipated. Additionally, in those areas where appraisals came in lower than expected, the gap was always less than 2%.

Bill Banfield, Quicken Loans Executive Vice President of Capital Markets, talked about the important role value plays when it comes to home financing.

“The HPPI is a reminder to have a good grasp on your area’s unique housing market before you start the mortgage process for either a home purchase or a refinance,” said Banfield. “Underestimating your home value could, understandably, feel like a windfall. But if a homeowner overestimates their home value, the mortgage could need to be reworked when refinancing – possibly even requiring the owner to bring more cash to the closing table.”

On a regional basis, homeowners are very close together in terms of how they estimate home value. Homeowners in the West are overvaluing their homes by 0.45%. The other regions are really close together with the Northeast coming in 0.5% high in their estimates while the difference of opinion between homeowners and appraisers is 0.51% in the Midwest and South.

Looking at Metropolitan Boston data, home values came in 1.71% higher than homeowner expectations, followed closely by Charlotte, N.C., at 1.61%. Chicago has been consistently on the other end of the spectrum, but even there, properties are only being undervalued by 1.67%. Homeowners in Kansas City, Mo., were closest to complete parity with appraisals coming in just 0.02% higher than homeowner expectations.

Home Value Index (HVI)

On a national basis, home values were up 2.15% in September. There’s been a 6.52% uptick since the same time a year ago.

With this being the largest monthly growth in 5 years, it’s clear that buyers are still out and looking at inventory.

“The clear news from the HPPI data is that home buyer interest is not falling with the leaves,” said Banfield. “Despite the start of the school year and the introduction of cooler temperatures in parts of the country, home shoppers are still active. Buyer interest, combined with persistently low home inventory, continues to drag up home values. With August’s jump in homebuilding, at its highest level in 12 years there could be some hope on horizon for home shoppers who haven’t been able to find a home that is a perfect fit at the right price.”

Home values were highest in the West where they’ve gone up 2.93% on the month and 5.51% on the year. In the Northeast, values are up 1.53% for the month and 4.52% year-to-year. Midwestern homeowners saw values rise 6.34% since September of last year and up 1.52% in September. In the South, values rose 0.26% on the month and 4.28% on the year.

If you’re looking to refinance, home values rising could enable you to access more equity. If you’re on the purchase side, mortgage ratesare really low. Consider getting started today!

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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