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Almost There

According to recent data by Quicken Loans, appraisal values lag homeowners’ expectations. The gap between opinions is small, but even a small amount can make a big impact.

The Home Price Perception Index (HPPI) and Home Value Index (HVI) were released today, representing the difference between appraisers’ and homeowners’ opinions of home values.

The gap between opinions is only 1.7 percent, but this represents the first time in seven months that the gap between the two opinions of value has lessened.

According to Quicken Loans EVP of Capital Markets, Bill Banfield, a 1 or 2 percent difference in home value opinions may not seem like a lot, but it could be enough to derail a mortgage.

“A homeowner could be forced to bring more cash to closing in order to make a mortgage work if the appraisal is lower than expected. On the other hand, if an appraisal comes in higher, they could be surprised with more equity than they had planned. Either way, if owners are aware of their local markets it will lead to smoother mortgage transactions,” Banfield said.

Despite the decrease in the opinion gap, there was an increase in home values nationwide by 1.2 percent from May to June, and an increase of 5.35 percent compared to June 2016.

The Midwestern and Eastern regions stuck with the national status quo with lower appraiser opinions. Conversely, the Western markets were more likely to have owners underestimate home values.

June also showed strong home value growth. The HVI showed appraisals increased an average of 1.25 percent from May to June, and increased 5.35 percent as well since last year.

The Northeast region was the only lack of growth in appraisal values with a 1.18 percent drop. However all regions showed annual increases from 2.17 percent in the Northeast to a 6.12 percent increase in the West.

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