There’s some discrepancy between homeowners and appraisers property values, according to a recent report by Quicken Loans. In its July National Home Price Perception Index (HPPI), the average difference in owner’s estimates and appraisers was 1.55 percent nationally, but some specific areas came in higher than expected.
Overall, the Quicken Loans National Home Value Index (HVI) showed appraised values have increased 0.33 percent on average from June to July, in line with year-over-year increases of 2.21 percent from July 2016. However, that wasn’t high enough compared to what homeowners thought it should be.
Luckily, the gap is thinning compared to June data when the gap was 1.7 percent, but in certain areas like the fastest growing housing markets, the inverse is happening of the national trends. In areas such as Dallas and Denver, appraisers are valuing homes higher than homeowners expected and Quicken Loans EVP of Capital Markets Bill Banfield said the difference in opinion could lead to a restructured mortgage.
“Our hope is that this index is eye-opening for homeowners. Their home equity could be thousands of dollars higher, or lower, than they realize,” Banfield said. “If they are aware of the perceived trends in their area it could help them better prepare for their home purchase or refinance.”
The positive momentum home values are experiencing had a more impactful increase when looking at year-over-year measures. The annual measure showed a 4.21 percent increase while all areas measured ranged from a 2.65 percent annual increase in the Northeast to a 5.64 increase in the West.
“The regional differences in home value growth mirror the perception difference across the country. Areas with slower growth were more likely to have owners overestimating their home value, and areas with much stronger growth had higher appraisals than owners realized they would be,” said Banfield. “With home values constantly changing, and the rates of change varying across the country, this is one more way to show how important it is for homeowners to stay aware of their local housing market.”
To see the full report, click here.