Appraisals better matched owner perceptions in October, coming in only 0.99 percent lower than expected, according to the latest Quicken Loans’ National Home Price Perception Index (HPPI). The latest Quicken Loans National Home Value Index (HVI) shows appraised values rose 4.76 percent year-over-year.
A summary of the HPPI:
Owner’s estimates of their home’s value rose above the actual appraised value by an average of 0.99 percent, according to the National HPPI. This marks the fifth consecutive month the gap between the two value opinions narrowed. Also, the HPPI is now the closest to equilibrium it has been since April 2015. The trend of appraisals surpassing homeowners’ estimates in Western cities continued in October, with appraisals as much as 3.13 percent higher than expected in Dallas. On the other hand, Eastern and Midwestern cities were more likely to have an appraisal below the owner’s estimate.
“Based on the HPPI, it appears homeowners in the markets where prices are rising faster than the national average—like Denver, Seattle and San Francisco—are continuing to underestimate just how quickly home values are rising, so the average appraisal is higher than the homeowner estimate,” says Bill Banfield, executive viec president of Capital Markets for Quicken Loans. “On the inverse of that, homeowners in areas where the values aren’t rising as fast may think they are rising faster than they are, leading to the appraisal lagging the estimate.”
A summary of the HVI:
The HVI, the only measure of home value change based solely on appraisal data, showed values increasing at a measured pace month-over-month and making larger strides on an annual basis. Nationally, appraised values rose 0.71 percent from September to October and jumped 4.76 percent year-over-year, according to the HVI. All regions had similar annual growth; however, the Midwest and the West had slight dips in monthly value.
“As we enter the traditionally slower demand season in the home purchase market, persistent supply constraints may keep home prices elevated,” Banfield says. “Compared to the previous year, our economy continues to improve and attract homebuyers who may have been on the sidelines during the past few years. This will add additional demand to the equation.”
For more information, please visit QuickenLoans.com/Indexes.
For the latest real estate news and trends, bookmark RISMedia.com.
