Detroit-based Quicken Loans recently reported appraiser home value opinions continued to fall below homeowner estimates in April, according to the company’s Home Price Perception Index (HPPI). The national index shows appraiser estimates 0.69 percent below homeowner estimates, on average.
The national Quicken Loans Home Value Index (HVI) reports home values increased 0.28 percent in April, after a slight dip in March.
Home Price Perception Index (HPPI)
The trend of a widening gap between appraiser and homeowner opinions continued in April, according to the Quicken Loans study of home value perceptions. The HPPI showed appraiser opinions were 0.69 percent below homeowner estimates. The index dipped compared to March when appraiser opinions were 0.40 percent below homeowner estimates. April marks the third consecutive month of appraiser opinions falling below homeowner estimates.
“While it is not surprising to most appraisers that homeowners are overestimating their home’s value on a national average, we should always make note of the direction the trend is heading to help set expectations for homebuyers and those looking to refinance,” says Quicken Loans Chief Economist Bob Walters. “There is nothing more disappointing to a homeowner than learning that the value of their home is less than they expected. This index is an important tool for lenders and homeowners alike as they set reasonable expectations for obtaining a mortgage.”
Home Value Index (HVI)
The national HVI, a measure of home values based solely on appraisals, increased in April after a drop in March, gaining 0.28 percent nationally. Values also continued their strong year-over-year increases, rising 5.54 percent since April 2014 on a national level. The West region had the largest annual gain of 6.58 percent on a yearly basis, while the Northeast posted the smallest increase with a 2.39 percent annual gain.
“Home values increased in April, however it was not enough to cancel out March’s decline,” Walters continued. “Homeowners that are still underwater are looking for large increases, but those increases can in fact price homebuyers out of the market. Home affordability could become a worry if home values increases get too far ahead of the modest pace of wage increases, which are sitting at about 2 percent annually.”
