The gap between what homeowners believe their home is worth and the appraised value has narrowed for the first time since the end of 2016
The gap between what homeowners believe their home is worth and the appraised value has narrowed for the first time since the end of 2016.
A report from Quicken Loans found that owners think their homes are worth 1.7% more than appraisers, down from 1.93% in June. Owners in the Midwest and Eastern regions are most likely to overvalue their home while those in Western markets are most likely to underestimate.
“While a 1 or 2 percent difference in home value opinions may not seem like a lot, it could be enough to derail a mortgage,” said Quicken Loans Executive Vice President of Capital Markets, Bill Banfield.
“A homeowner could be forced to bring more cash to closing in order to make a mortgage work if the appraisal is lower than expected. On the other hand, if an appraisal comes in higher, they could be surprised with more equity than they had planned. Either way, if owners are aware of their local markets it will lead to smoother mortgage transactions,” advised Banfield.
Quicken Loans has also published its latest analysis of national home values and says that there was a 1.25% jump in June compared to May and a 5.35% year-over-year increase.
Values in the Northeast though were down 1.18% month-over-month in June, but the region saw an annual gain of 2.17%. The highest annual gain was in the West, up 6.12%.
“What’s clear is that the demand for housing is strong in much of the country. With interest rates remaining historically low, this could be the time for a homeowner to move on to the new construction home they had their eye on,” said Banfield. “If they do so, it would open home options for first time home buyers entering the market. The additional inventory could lead to more balanced prices, moving away from the spike in annual growth we have seen lately.”
A report from Quicken Loans found that owners think their homes are worth 1.7% more than appraisers, down from 1.93% in June. Owners in the Midwest and Eastern regions are most likely to overvalue their home while those in Western markets are most likely to underestimate.
“While a 1 or 2 percent difference in home value opinions may not seem like a lot, it could be enough to derail a mortgage,” said Quicken Loans Executive Vice President of Capital Markets, Bill Banfield.
“A homeowner could be forced to bring more cash to closing in order to make a mortgage work if the appraisal is lower than expected. On the other hand, if an appraisal comes in higher, they could be surprised with more equity than they had planned. Either way, if owners are aware of their local markets it will lead to smoother mortgage transactions,” advised Banfield.
Quicken Loans has also published its latest analysis of national home values and says that there was a 1.25% jump in June compared to May and a 5.35% year-over-year increase.
Values in the Northeast though were down 1.18% month-over-month in June, but the region saw an annual gain of 2.17%. The highest annual gain was in the West, up 6.12%.
“What’s clear is that the demand for housing is strong in much of the country. With interest rates remaining historically low, this could be the time for a homeowner to move on to the new construction home they had their eye on,” said Banfield. “If they do so, it would open home options for first time home buyers entering the market. The additional inventory could lead to more balanced prices, moving away from the spike in annual growth we have seen lately.”
