Quicken Loans reported that average home appraisals in October were lower than the value expected by the homeowner, the second month the gap between values narrowed, and ninth consecutive month where homeowners’ estimates of value exceeded the appraised value of the home.
Appraisals were 1.98 percent lower than what the homeowner was projecting the value would be, according to the national Home Price Perception Index (HPPI). The perception gap was slightly larger in September, at 2 percent.
“It’s too early to call it a trend, but it is encouraging to see the gap between the estimates homeowners provide and the appraised values starting to narrow,” Quicken Loans Chief Economist Bob Walters said in a press release announcing the monthly index. “The more homeowners are in line with appraisers, the easier it will be to refinance their mortgage and easier for those looking to buy a home. If the two are aligned, it estimates one of the top stumbling blocks in the mortgage process.”
Nationally, the Home Value Index (HVI) numbers showed home values climbing 1.07 percent in October. The increase comes after two months of flat home value changes. Values continue to rise annually, with a 4.01 percent gain compared with a year earlier.
Regionally, all four areas saw measured increases, with the Northeast registering the highest home appreciation increase at 1.94 percent.
The HPPI showed during October 2015 the West with appraisal values 1.74 percent lower than homeowners’ estimates. In the South –the HPPI was 1.92 percent lower, the Midwest –was 2.16 percent lower and the Northeast at was 2.17 percent lower. By comparison, in October 2014 the West was 3.21 percent higher, the South 2.47 percent higher, the Midwest 0.05 percent higher and the Northeast 0.56 percent lower.
“Home values continue to make steady, healthy, growth,” Walters said. “Equity gains increase homeowner faith and enthusiasm in the housing market. There are still many Americans underwater, but with every bump in equity more homeowners who have been waiting to list their home are able to sell or more easily refinance, which takes pressure off of those homeowners and provides housing inventory for the first time homebuyers.”