Gap between owner, appraiser valuations tightest in 3 years
The gap between the value homeowners place on their properties and those assessed by professional appraisers has narrowed.
Average appraised values in June came in just 0.25% below what homeowners expected them to be according to the National Quicken Loans Home Price Perception Index.
The owners’ figures are provided at the beginning of the mortgage process while the appraisers’ data obviously come later. However, it’s the closest alignment of the two since February 2015.
Appraised values were lower in June than the previous month; down 0.63% according to the index; although they were up 4.57% year-over-year.
“Getting an accurate market value is an important, albeit often misunderstood, part of the mortgage process,” said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “The valuation has historically involved an appraiser coming to personally inspect the home and give their personal opinion of its value. Now more technology is becoming available to modernize the appraisal process. However, even with a more data-based approach, there can be some disconnect between the appraised value and homeowners perception of value.”
Home equity slightly lower in June
Quicken Loans Home Value Index shows that there was a slight decrease in home equity month-over-month in June.
The 0.63% national drop was led by a 3.35% drop in the Northeast. Annually the largest rise was in the West (5.76%).
“The home value growth in June reflects a much healthier housing market than we have seen in years past,” Banfield said. “Some fluctuation month-to-month is normal for a well-functioning real estate market. The annual appraisal changes are also in a healthy range. This slow rise, not straying too far from the inflation rate, helps keep control of affordability.”
