Homeowners are pretty realistic about home values

by Steve Randall13 Nov 2018

For the eight month in a row the gap between the values homeowners applying for a mortgage put on their homes, and those determined by appraisers, remains below 0.5%.

In fact, in October, the difference was just 0.28% according to the Quicken Loans Home Price Perception Index (HPPI).

“With homeowner estimates and appraiser opinions moving more closely together, mortgages are less likely to run into snags in the process," said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. "With the combination of a better understanding of appraisal values, and continued home value increases, this could be a good time for homeowners to tap into their growing equity to pay off higher interest debt or make home improvements."

Price growth has slowed
But the mortgage lender’s Home Value Index reveals that home price growth is slowing. October’s appraised values were down 0.55% from the month prior but up 4.39% since October 2017, the lowest year-over-year increase in the last twelve months.

Slowing prices is most obvious in the Northeast with just a 2.59% annual increase in appraised values and a 0.48% decline month-over-month.

"The pace of home price growth appears to be moderating and varies by region representing a healthy adjustment to strong price gains of the past," Banfield said. "Slower gains in prices can balance out changes in interest rates affecting affordability for those looking to purchase a new home."


Geographic

Regions

 

HVI

October 2018

 

January 2005 =
100

HVI

October 2018

vs.

September 2018

% Change

HVI

October 2018

vs.

October 2017

% Change

HPPI

October 2018

 

Appraiser Value
vs. Homeowner
Perception of
Value*

HPPI

October 2017

 

Appraiser Value
vs. Homeowner
Perception of
Value*

West

134.5

-1.28%

+6.04%

-0.13%

-0.81%

South

111.68

+0.32%

+3.97%

-0.26%

-1.02%

Northeast

102.35

-0.48%

+2.59%

-0.36%

-1.11%

Midwest

90.76

+0.06%

+4.32%

-0.39%

-1.05%

*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

 


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