The margin shrunk as home value continued to increase across the US
The gap between owner perceptions and appraiser opinions of home values shrunk for the sixth straight month in November to its narrowest margin this year, according to Quicken Loans’ National Home Price Perception Index (HPPI).
The HPPI revealed that home appraisals in November were an average 0.67% lower than what owners expected. Despite the lag, Quicken Loans’ Home Value Index (HVI) found that home values increased 4.24% from November 2016. The company said values continued to rise across the US in spite of a 0.09% slip on a month-over-month basis.
Despite the national improvement in the HPPI, Quicken Loans said there were wide regional variations. At the low end of the scale was Cleveland, where appraisals were on average 2.35% lower than expectations. Meanwhile, Dallas homeowners were found to have underestimated their homes’ value by an average 3.25%.
"It's encouraging to see opinions from homeowners and appraisers more aligned on a national level," said Bill Banfield, Quicken Loans executive vice president of capital markets. "Appraisals are one of the most important data points when applying for a mortgage. If an appraisal is lower than expected when refinancing, the homeowner will need to bring more funds to closing, or might even need the mortgage to be restructured. The more homeowners and appraisers agree, the smoother the process is."
