Quicken Loans released their Home Price Perception Index (HPPI) for August on Tuesday, which showed a continued gap between appraisal values and homeowners expectations, although the gap is growing increasingly smaller.
According to the report, the Home Value Index (HVI) also rose 0.19 percent on a national scale in August, with a 2.64 percent increase year-over-year. However, home appraisals were 1.35 percent lower than what the average homeowner expected. In July, the difference in appraisal figures and homeowner expectations was 1.55 percent.
“One of the biggest lessons from the HPPI, is highlighting how regionalized real estate is,” said Bill Banfield, Quicken Loans EVP of Capital Markets. “Homeowners who have a better understanding of their local housing market can make more informed decisions about their home. After all, their house is not just where they live, but one of their bigger assets.”
In the West, homeowners showed a trend of underestimating the value of their home by 3 percent, while in the Midwest and Northeast, homeowners overestimated the value of their home by 3 percent. And, the report notes, that while 3 percent may seem like a small amount, that could mean the difference of $11,000 in unknown equity, depending on the regional housing market.
The Midwest and the West also experienced rising HVI numbers, at 0.16 percent and 1.34 percent respectively. The South and East regions HVI dropped a modest amount, at 0.52 percent and 0.58 percent.
According to Banfield, this data is best viewed on an annual basis, rather than in monthly increments. “As the sun sets on the summer, some of the intense competition for housing also winds down,” said Banfield. “It’s important to focus on the annual numbers with the HVI. While there can be some monthly variations in the data, especially as seasons start to change, the annual numbers show healthy growth across the country.”