The average appraisal is half of a percent less than homeowner estimates
For the third month in a row, the gap between the homeowner estimate and appraiser opinion continued to narrow.
Appraisals of US homes in October were an average of 0.45% lower than what homeowners expected, according to the National Home Price Perception Index (HPPI).
The results showed that most homeowners were not likely to be shocked by their appraisals, which were less than 2% lower or higher than expected in all metro areas. The appraisals range from an average 1.64% lower than projected in Chicago, to an average of 1.4% higher than what owners predicted.
“While most areas in the have not hit equilibrium for home price perception, there is stability in much of the country,” said Bill Banfield, executive vice president of capital market at Quicken Loans. “With such a small difference between appraised values and estimated values, homeowners are less likely to run into snags in the mortgage process when refinancing or buying a new home.”
The Quicken Loans Home Value Index (HVI) also flattened, dropping 0.04% from September to October. Despite home price growth being essentially stagnant, the annual measure revealed appraisals climbed 7.07% since October last year.
Home values in the West made the biggest decline, falling 0.75% monthly, but rising 6.07% yearly. The Northeast was the only area where appraisals grew 0.08% in October, while the South saw a 3.77% increase.
“The leveling off we saw in October is actually a welcome sign, especially to first-time homebuyers who are focused on affordability,” Banfield said. “An ideal economic equilibrium would be steadily increasing home values that keep pace with inflation and wage growth. This year’s lower interest rates and the moderating level of home prices has [have] improved affordability despite low a low supply of homes for sale.”
