Quicken Loans finds only narrow gap with appraisals
Homeowners are keeping it real with the values they place on their homes.
Quicken Loans’ study shows that owners applying for refinance mortgages valued their homes an average 0.29% higher than professional appraisers in September, in line with the 0.28% seen in August.
The perception gap has narrowed in recent months and is far lower than the 1.14% seen a year ago.
"A wide gap between the estimated home value and the appraised value can cause a mortgage to be reworked, or in some cases, scrapped altogether," said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. "All the more reason for homeowners to be realistic when their mortgage banker asks them what they think their home is worth when they start the financing process.”
Home value gains slowing
The analysis also shows a slowdown in appraisal values to 0.35%, less than half that of August. Annually, the Quicken Loans Home Value Index gained 5.69% in September compared to 5.79% in August.
"Rapid price increases that have spanned more than half a decade have started to affect affordability as average wage increases struggle to keep up," said Banfield. "While home values are still rising, especially with solid annual jumps, a slowdown in monthly growth is expected to allow the market balance with the more moderate inflation."
