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Quicken Study Shows Division Between Appraiser and Homeowner Estimates

A new Quicken Loans study reveals that appraiser home value opinions fell below homeowner estimates in April according to the company’s Home Price Perception Index (HPPI). Quicken Loans is the nation’s second largest retail mortgage lender.

The HPPI index data revealed that the trend of broadening differences between appraiser and homeowner views continued in April. On average, appraiser estimates are lower than homeowner estimates by 0.69 percent, compared to appraiser opinions being 0.40 percent below homeowners in March. Of the metro areas that were measured, 63 percent of appraiser opinions of values remained higher than homeowner estimates. April will be the third consecutive month that these differences in appraiser opinions have fallen below homeowners’.

“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 direction the trend is heading to help set expectations for homebuyers and those looking to refinance,” said Bob Walters, Quicken Loans chief economist. “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.”

Following a slight drop in March, the national Quicken Loans Home Value Index (HVI) reports an increase of 0.28 percent in home values for April. Home values showed little increases nationally and in all regions and had modest yearly increases.

According to the company, 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 said. “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.”

To view the full report visit: QuickenLoans.com

About Author: Xhevrije West

Xhevrije West is a writer and editor based in Dallas, Texas. She has worked for a number of publications including The Syracuse New Times, Dallas Flow Magazine, and Bellwethr Magazine. She completed her Bachelors at Alcorn State University and went on to complete her Masters at Syracuse University.
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