Price perceptions aligned more with appraisals in July
Homeowner expectations of home values improved in July, as they were more likely to be at or below appraised values, according to the Home Price Perception Index (HPPI) released by Quicken Loans.
The gap between the appraisers’ and owners’ opinions of home values narrowed during the month, with appraisals only 0.28% lower than expected. The difference remains steady compared to June when appraisals were 0.25% lower than homeowner opinions.
On a year-over-year basis, however, there was a vast improvement. Appraisals in July 2017 were 1.55% lower than what the owner estimated.
“The story the HPPI is currently telling is one of an ever-strengthening housing market,” said Bill Banfield, executive vice president of capital markets at Quicken Loans. “With more appraisals meeting, or even reaching beyond, the level homeowners were expecting, it’s clear home values in the majority of areas have recovered to the point where the owners’ personal view is finally lining up with the appraisers’ expert view.”
Quicken Loans also found that the perception gap improved at the local level as well. Appraisal values were higher than expected in nearly 80% of the metro areas examined.
Another indication of the housing market’s health was the strong annual growth in the Home Value Index (HVI). The measure of home value changes based solely on appraisal data showed a 4.86% increase in appraisal values in July from the year-ago period. Month-over-month, the HVI dropped slightly by 0.6%.
“The HVI is telling a similar story of the housing market’s health,” Banfield said. “Other than some small monthly shifts, home values continue to grow at an annual pace exceeding inflation. This can hurt affordability and hinder first-time buyers from entering the market.”
