By John Gorecki
• Home values dropped 0.09% nationally in November, with a 4.24% year-over-year increase, according to the Quicken Loans HVI
DETROIT, December 12, 2017 – Homeowners, on average, have a higher opinion of their home values than appraisers do. However, the gap between the average owners’ estimates and the average appraised values has reached its narrowest margin in 2017. In November, home appraisals were an average of 0.67 percent lower than what owners expected, according to Quicken Loans’ National Home Price Perception Index (HPPI).
Though owner expectations have lagged appraiser opinions, home values continue to climb across the country. In fact, home values have risen 4.24 percent year-over-year – despite a slight 0.09 percent dip from October to November.
Home Price Perception Index (HPPI)
The gap between owner perceptions and appraiser opinions of home values is the smallest since March 2015. November is also the sixth-straight month the gap between the two values has narrowed. Owner expectations were an average of 0.67 percent higher than what an actual appraisal showed, according to November’s National HPPI. This value varies widely across the country. Cleveland is on the low end of the scale, with appraisals an average of 2.35 percent lower than expected. On the flip side, homeowners in Dallas are underestimating their homes’ value – with the average appraisal 3.25 percent higher than what the owner estimated.
“It’s encouraging to see opinions from homeowners and appraisers more aligned on a national level,” said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “Appraisals are one of the most important data points when applying for a mortgage. If an appraisal is lower than expected when refinancing, the homeowner will need to bring more funds to closing, or might even need the mortgage to be restructured. The more homeowners and appraisers agree, the smoother the process is.”
Home Value Index (HVI)
Nationally, the HVI showed a slight dip in appraisal values in November – with a 0.09 percent decrease from October. However, a 4.24 percent increase since the previous year has helped maintain the positive momentum in the annual measure. While all regions had year-over-year growth, the southern and northeast experienced slight drops in average home value from October to November.
“As we move into the holiday season, Americans are focusing less on finding their dream home and more on finding the perfect gifts to give to their loved ones,” said Banfield. “As housing demand temporarily cools this time of year, we also see a dip in home values. However, it’s a promising sign to see values continue rising annually.”
About the HPPI & HVI
The Quicken Loans HPPI represents the difference between appraisers’ and homeowners’ opinions of home values. The index compares the estimate that 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 second largest retail home mortgage lender. The company closed more than $400 billion of mortgage volume across all 50 states from 2013 through 2017. Quicken Loans moved its headquarters to downtown Detroit in 2010, and now more than 17,000 team members from Quicken Loans and its Family of Companies work in the city’s urban core. The company generates loan production from web centers located in Detroit, Cleveland and Scottsdale, Arizona. The company 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 Customer Satisfaction for Primary Mortgage Origination” in the United States by J.D. Power for the past eight consecutive years, 2010 – 2017, and highest in customer satisfaction among all mortgage servicers the past four years, 2014 – 2017.
Quicken Loans was ranked No. 10 on FORTUNE magazine’s annual “100 Best Companies to Work For” list in 2017, and has been among the top 30 companies for the past 14 consecutive years. The company has been recognized as one of Computerworld magazine’s “100 Best Places to Work in IT” the past 13 years, ranking No. 1 for eight of the past 12 years, including 2017. The company is a wholly-owned subsidiary of Rock Holdings, Inc., the parent company of several FinTech and related businesses. Quicken Loans is also the flagship business of Dan Gilbert’s Family of Companies comprising nearly 100 affiliated businesses spanning multiple industries. For more information and company news visit QuickenLoans.com/press-room.
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