Quicken Loans, a Detroit-based mortgage lender reported today that the difference between appraiser and homeowner perceptions of home values continued to increase for the fourth consecutive month in May. For the first time in 22 months, appraiser opinions of home values were 1.15 percent lower than homeowner estimates, according to Quicken Loans’ national Home Price Perception Index (HPPI).
“The HPPI, more than anything, is a reminder that there is no such thing as a national housing market,” said Bob Walters, Quicken Loans chief economist. “Every city, and every neighborhood, moves in different directions based on local factors. Consumers need to remember to watch their local area closely to understand the direction their market is heading.”
According to Quicken Loans, the HPPI represents the difference between appraisers’ and homeowners’ opinions of home values. The index compares the estimate that the homeowner supplies on the mortgage application to the appraisal that is performed later in the mortgage process. Both of these reports are created with Quicken Loans’ propriety mortgage data from the 50-state lenders’ mortgage activity across all 3,000+ counties. The indexes are examined nationally, in four geographic regions and the HPPI is reported for 27 major metropolitan areas
The index found that home values continued to steadily climb nationally, and in many regions of the country. The national Home Value Index (HVI) increased 0.24 percent in May from its April level, and rose 4.64 percent since last year. In April, appraiser opinions were 0.69 percent lower than homeowner estimates, while all regions saw an increase except the Northeast, which only demonstrated a 0.90 percent annual increase. Despite the widening perception gap at the national level, appraiser opinions remain higher in the majority of the metro areas examined.
“While smaller monthly increases and a slowing of the annual growth may sound discouraging, it is precisely the measured, healthy growth that is needed to embolden homebuyers and create a sustainable housing market,” explained Walters. “A more balanced market between buyers and sellers almost always leads to continued steady home value increases.”
Click here to view the complete Quicken Loans' Home Price Perception Index and Home Value Index.