Gap between appraisers, homeowners narrows
Homeowners’ expectations of the value of their homes has become more closely aligned with appraisals.
A report from Quicken Loans shows that, in April, homeowners believed their homes were worth just 0.33% more than appraisals and just 5 of 27 metros analyzed for the Home Price Perception Index reported appraisals lower than owners’ estimates.
"The appraisal is one of the most important, although sometimes least predictable, parts of the mortgage process," said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. "The Home Price Perception Index is a way to illustrate the differences of opinion, and these differences affect everything from the type of mortgage a borrower can get to the expectations a seller has about the proceeds available upon sale of their home."
Prices continue to rise
Meanwhile, the National Quicken Loans Home Value Index showed an increase of 6.47% year-over-year in April, but a 0.05% dip in the month from March.
The Northeast was the only region showing a decrease in home value at a 1.24% decline. The region also had the lowest year-over-year increase, with all regions positive: Northeast up 2.22%, Midwest up 5.81%, South up 5.86% and the West up 9.44%.
"The skyrocketing home values in the West is a trend with no end in sight. Until home building pace picks up, in combination with more existing homes being listed for sale, affordability will continue to wane," Banfield said. "The other regions of the country are showing annual price gains as well but at a more moderate pace. Time will tell if the slightly higher interest rates in 2018 start to slow demand or if the inventory shortage ends up being a larger contributor to price changes."
