• Home values dipped 0.63% nationally in June, but posted a 4.57% year-over-year increase, according to the Quicken Loans HVI
DETROIT, July 10, 2018 – Appraisal values and what homeowners expected them to be are at their closest point since February 2015. The National Quicken Loans Home Price Perception Index reported that the average home appraisal in June was only 0.25 percent lower than what the owners estimated.
While home value perceptions continue to improve, appraisal values themselves posted a slight retreat in June. The average appraisal value fell 0.63 percent from May to June, according to the National Quicken Loans Home Value Index. However, the report showed growth when compared to the previous June – increasing 4.57 percent year-over-year.
Home Price Perception Index (HPPI)
The home value estimate provided by owners at the beginning of the refinance process is increasingly aligned with the actual value appraisers assign to the property later in the mortgage process. The two data points moved closer together in June, with the National HPPI reporting appraiser opinions were only 0.25 percent lower than what owners estimated. This is a vast improvement from the previous June, when appraisals where 1.70 percent lower than expected, and it is now the closest together the two opinions have been since February 2015. As the average gap between value opinions narrows on a national level, more metro areas are seeing appraisals higher than expected. Nearly three quarters of the metro areas measured are seeing the bulk of their appraisals come back higher than what was expected.
“Getting an accurate market value is an important, albeit often misunderstood, part of the mortgage process,” said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “The valuation has historically involved an appraiser coming to personally inspect the home and give their personal opinion of its value. Now more technology is becoming available to modernize the appraisal process. However, even with a more data-based approach, there can be some disconnect between the appraised value and homeowners perception of value. We hope the Home Price Perception Index can shine some light on that gap, limiting surprises during a home sale or mortgage refinance.”
The Quicken Loans HVI reported a slight decrease in home equity with a 0.63 percent drop from May to June. However, the average home appraisal rose 4.57 percent year-over-year, displaying healthy, measured growth. On a regional level, the Northeast had the largest monthly fall, with a 3.25 percent drop from May to June. When viewed on an annual level, the West had the largest increase, with a 5.76 percent rise in home equity from since June 2017.
“The home value growth in June reflects a much healthier housing market than we have seen in years past,” Banfield said. “Some fluctuation month-to-month is normal for a well-functioning real estate market. The annual appraisal changes are also in a healthy range. This slow rise, not straying too far from the inflation rate, helps keep control of affordability.”
About the HPPI & HVI
The Quicken Loans HPPI represents the difference between appraisers’ and homeowners’ opinions of home values. The index compares the estimate that the homeowner supplies on a refinance mortgage application to the appraisal that is performed later in the mortgage process. This is an unprecedented report that gives a never-before-seen analysis of how homeowners are viewing the housing market. The HPPI national composite is determined by analyzing appraisal and homeowner estimates throughout the entire country, including data points from both inside and outside the metro areas specifically called out in the above report.
The Quicken Loans HVI is the only view of home value trends based solely on appraisal data from home purchases and mortgage refinances. This produces a wide data set and is focused on appraisals, one of the most important pieces of information to the mortgage process.
The HPPI and HVI are released on the second Tuesday of every month. Both of the reports are created with Quicken Loans’ propriety mortgage data from the 50-state lenders’ mortgage activity across all 3,000+ counties. The indexes are examined nationally, in four geographic regions and the HPPI is reported for 27 major metropolitan areas. All indexes, along with downloadable tables and graphs can be found at QuickenLoans.com/Indexes.
About Quicken Loans
Detroit-based Quicken Loans Inc. is the nation’s largest home mortgage lender. The company closed more than $400 billion of mortgage volume across all 50 states from 2013 through 2017. Quicken Loans moved its headquarters to downtown Detroit in 2010. Today, Quicken Loans and its Family of Companies employ more than 17,000 full-time team members in Detroit’s urban core. The company generates loan production from web centers located in Detroit, Cleveland and Phoenix. Quicken Loans also operates a centralized loan processing facility in Detroit, as well as its San Diego-based One Reverse Mortgage unit. Quicken Loans ranked highest in the country for customer satisfaction for primary mortgage origination by J.D. Power for the past eight consecutive years, 2010 – 2017, and also ranked highest in the country for customer satisfaction among all mortgage servicers the past four consecutive years, 2014 – 2017.
Quicken Loans was once again named to FORTUNE magazine’s “100 Best Companies to Work For” list in 2018 and has been included in the magazine’s top 1/3rd of companies named to the list for the past 15 consecutive years. In addition, Essence Magazine named Quicken Loans “#1 Place to Work in the Country for African Americans.”
For more information and company news visit QuickenLoans.com/press-room.