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Varying Opinions on the Home Valuation Front

appraisalWhat homeowners think their houses are worth and what they’re actually worth are slightly off nationally, but the gap between owner estimates and real appraisals did close a little in April, according to the latest Home Price Perception Index from Quicken Loans.

Although owners are still overvaluing their homes, they are getting  closer to appraised opinions. The index, which is based on Quicken Loans' application and appraisal data, showed that appraiser valuations were 1.95 percent lower than what homeowners estimated in April.

Since March, the gap between the two values has narrowed from when appraisals were 2.17 percent lower than homeowner expectations. The HPPI has experienced some slight fluctuations but has spent most of the last year around the -2 percent mark.

“The HPPI is in a healthy trend, nationally,” said Quicken Loans Chief Economist Bob Walters. “While everyone wants their appraisal’s to come back showing more equity than anticipated, like some homeowners in the West, the discrepancy we are seeing now won’t likely derail a mortgage transaction.”

Mid-2013 and 2015 was the only time since 2007 that appraisers valued homes more than homeowners. This rare occasion ended at the start of 2015 and homeowner opinions continued to increase through mid-2015, up until it reversed directions and headed toward an equilibrium point between homeowners and appraisers.

Home values fell month-over-month by 0.66 percent since March, but increased year-over-year by 3.79 percent according to Quicken Loans’ national Home Value Index (HVI).

“The steady annual increase in home values shows sustainable growth and an improving economy,” said Walters. “We always look for gains to be similar to inflationary growth while avoiding the hikes that could lead to bubble fears. We are currently in that range, which should come as a more comforting sign to many homeowners.”

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